FX Update: The dollar has remained on a downward path
FX Update: The dollar has remained on a downward path with USD-JPY extending the sharp decline of yesterday, logging a two-month low of 111.06 in a thin Asia-Pacific session, lacking Tokyo participation due to Japan's version of thanksgiving, before settling around the 111.30 mark. EUR-USD logged an eight-day high of 1.1839 and the USD index (DXY) fell to a one-month low. The buck's weakness follows soft initial claims and durable orders data out of the U.S. yesterday, followed up by the minutes to the recent Fed meeting saying that "with core inflation readings continuing to surprise to the downside...many participants observed that there was some likelihood that inflation might remain below 2% for longer than they currently expected." While the minutes still left the path clear for a 25 bp rate hike at the upcoming December FOMC, the minutes and backdrop of benign inflation has left markets questioning the potential for further tightening in 2018, which is seeing forex markets adjust positioning accordingly. More of the same seems likely for now. U.S. markets are absent today, and conditions will remain relatively thin until next week now.