Dollar exhibits softer performance ahead of eventful week

The US Dollar faces selling pressure as investors await fresh catalyst. Dovish bets on the Fed and lower US yields weakened the green currency. The US will release the preliminary estimate of Q3 GDP and PCE inflation data this week.

The US Dollar Index declined to the 105.75 area. Falling US Treasury yields avail the opportunity for financial markets to bet on lower odds of an interest rate hike by the US central bank and accordingly interest in the dollar could be fading.

The latest data from the United States economy suggests that the economic activity is strong. On Thursday, the US will reveal the preliminary estimate of the Q3 Gross Domestic Product (GDP), and on Friday the headline and core measures of the Personal Consumption Expenditures (PCE) from September will be released.

The latter is the Fed’s preferred gauge of inflation. In line with that, both data points will give a clearer outlook of the US economy and may play a big role with the modeling of expectations for the next Fed’s decisions on November 1 and in December.