The US dollar is seen to be still trading strong against most major currencies, but the increase in value is seen to be limited.
This was driven by the dollar index (DXY) which began to level off at 103,300 points while the 10-year United States (US) treasury yield began to show a decline to around 4.03%.
There has been no change in the factors driving the movement of the US dollar since last week where expectations for the Federal Reserve (Fed) to take a more moderate approach in easing monetary policy will continue.
The US dollar moved slightly weaker in the European session yesterday before returning to show strengthening in the New York session.
While the Euro continues to be under pressure ahead of the European Central Bank (ECB) policy meeting which is expected to lower interest rates by 25 basis points this Thursday.
The pound managed to show an increase in value in the European session yesterday following the publication of the UK jobs report showing a decrease in the unemployment rate in August.
Will affect the Pound today (Wednesday) is the UK inflation data that will be published at the beginning of the European session shortly.
The Canadian dollar rose to a 10-week high against the US dollar after Canadian inflation data was published at the start of the New York session yesterday.
Canadian inflation fell lower to 1.6% for September from 2% the previous month, marking the lowest inflation rate since February 2021.
This situation will force the central bank of Canada to continue its monetary policy easing measures after 3 consecutive meetings of interest rate cuts.
But the Canadian dollar again exhibited strengthening towards the end of the New York session. Analysts warned to be wary of profit taking activities for the Loonie which has risen for 10 days in a row.
