Powell indicated an earlier-than-expected tapering schedule, DXY Index fell below the 96-level

The DXY Index fell below the 96-level on Wednesday, currently trading at 95.91. Earlier, Powell testified before the Senate Banking Committee hearing that the Fed will discuss whether to wrap up asset tapering in its December meeting. The decision, if being made in its next meeting, will be a few months earlier than originally scheduled. Although this time Powell finally avoided describing high inflation as “transitory”, he was confident that omicron’s impact would be less severe than 2020. In response, traders wound up interest rate hike expectations, with money markets now almost fully priced for earlier tightening.

In China, factory activity in November declined into the contraction zone. Caixin PMI landed at 49.9, below the 50-mark which indicates growth. Surveys reveal that rising unemployment and prices have exerted much pressure on manufacturers.