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NEW YORK: The dollar slipped on Wednesday as an estimate of jobs gains in November missed expectations before a highly anticipated speech by Federal Reserve Chairman Jerome Powell.

The dollar index added to earlier losses after the ADP National Employment report showed that US private payrolls increased far less than expected in November, suggesting demand for labor was cooling amid high interest rates.

It briefly pared some losses, however, after data showed that the US economy rebounded more strongly than initially thought in the third quarter, with gross domestic product increasing at a 2.9% annualized rate.

“You have the data potentially reaching a turning point, which is celebrated by the market because it reinforces that expectation that the Fed is not only downshifting, but maybe yields are nearing a limited runway in terms of how much more tightening there is to go,” said Mazen Issa, senior FX strategist at TD Securities in New York.

Investors are focused on whether Powell will give any new indications that the US central bank may be nearing the end of its tightening cycle when he speaks on Wednesday afternoon.

The dollar index has fallen to 106.39 from a 20-year high of 114.78 on Sept. 28 and is on track for its biggest monthly loss since September 2010 as investors look toward the US central bank reaching a peak rate early next year.

Powell may push back against the notion that a pivot is coming soon given the uncertainty of future jobs and inflation releases.

Greater divergence between the views of various Fed officials on future monetary policy could also muddy market expectations.

“There’s a little bit more variation in the tone of the Fed from several members so as much as he may come out hawkish. I think the market is going to discount some of that,” said Issa.

The US central bank is expected to hike rates by an additional 50 basis points when it meets on Dec. 13-14. Traders are pricing for the fed funds rate to peak at 5.06% in June, from 3.83% now, before falling back to 4.69% by Dec. 2023. The euro rose 0.51% against the US currency to $1.0381. The greenback gained 0.41% to 139.28 Japanese yen .

Data earlier on Wednesday showed that euro zone inflation eased far more than expected in November, raising hopes that sky-high price growth is now past its peak and bolstering, if not outright sealing the case for a slowdown in European Central Bank rate hikes next month.

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