DXY: Dollar Index Sells Off Nearly 3% to 104.00 as US Inflation Slows to 3.2% for October

The dollar index fell off a cliff following the latest CPI report. The drop in price growth fueled hopes the Fed won’t touch rates any time soon.

• The US dollar index DXY nosedived Tuesday after the latest inflation report sparked excitement that price growth might finally be shrinking. The consumer price index for October showed prices increased by a less-than-expected 3.2%, and below September’s 3.7%. The data triggered a sharp selloff in the US dollar.
• The dollar index, a gauge for the greenback’s value against six major rivals, fell roughly 3% on the day, sliding from 107.00 to levels near 104.00. Across individual players, the EURUSD rallied nearly 2% to $1.0880, the GBPUSD added just over 200 pips to $1.2493, and the USDJPY tumbled 0.8% to 150.50.
• Falling inflation is welcome news for markets and for the Federal Reserve. The central bank is now widely expected to skip a rate hike at its December meeting. But also to consider another do-without at the first meeting of 2024 if the downward trajectory is sustained, ideally all the way to the 2% target.