On Wednesday (Oct. 26) European trade, rose sharply, temporarily traded at 111.09, up 0.22 percent.
A survey showed U.S. business activity contracted for a fourth straight month in October, the latest evidence of weakness in the face of high and rising inflation.
While a fourth consecutive 75 basis point increase looks set for the November meeting, policymakers have already begun discussing the size of future increases.
On top of that, recession fears in the United States are gaining wider attention.
Us Treasury Secretary Janet Yellen is reported to have said “risks cannot be ruled out” when talking about a recession.
Most economists expect the Fed to cut its December rate hike to 50 basis points.
Still, investors seem confident that the Fed will continue its aggressive policy tightening cycle, which in turn is supporting the rise in Treasury yields and aiding the recovery.
The dollar came under heavy selling pressure after the release of disappointing US macroeconomic data on Tuesday. The Dollar Index fell more than 1%.
The dollar index struggled to rebound and held below 111.00 in early trade on Wednesday, even as the market’s risk aversion was reflected in lower U.S. stock futures.
