NEW YORK: The dollar fell across the board for a second straight day on Friday, as investors favoured riskier currencies following a cooler-than-expected US inflation data that boosted the case for the Federal Reserve to ease off its hefty interest rate hikes. Friday’s dollar weakness was an extension of the move set off after Thursday’s data that showed US consumer inflation rose 7.7% year-on-year in October, its slowest rate since January and below forecasts for 8%. The dollar’s long rally over the last two years had drawn a host of dollar bulls leading to crowded positioning and Thursday’s data left a lot of them looking for a quick exit, strategists said.
“It’s not just short-term trend-followers, momentum players having to get out of positions, but some long-term structural long dollar positions have to be unwound,” said Marc Chandler, Chief Market Strategist, at Bannockburn Global Forex in New York.
