FX Update: The dollar has retained a soft tone
FX Update: The dollar has retained a soft tone, settling in the lower 112s versus the yen, near the week's low at 111.99 (which was seen on Tuesday), edging near nine-day lows versus sterling and logging a new nine-day low in the case against the Australian dollar, and drifting back some against the euro. EUR-USD lifted to the 118.50 area on a Bloomberg report that the ECB is considering halving asset purchases next year but with a longer than hitherto expected nine-month extension to the program. Attention today will be on U.S. CPI data, as benign data would fit concerns among some Fed policymakers that low inflation is not a transitory phenomenon. Analysts expect U.S. headline CPI to lift to 0.6% m/m (median same) from 0.4% m/m, driven by the rise in petroleum prices, but see core CPI remaining at a benign 0.2% m/m. Sterling and Brexit issues will remain at the fore. Talk of a no-deal exit from the EU has been increasing, with five rounds of negotiation (the fifth having concluded yesterday) having reached "deadlock," according to the EU's chief Brexit negotiator, Barniar. He also said that the EU would agree to a two-year transitory period, to buy more time after actual Brexit occurs in March 2019.