Dollar steady ahead of key inflation data
The U.S. dollar stabilized near a seven-week high Thursday ahead of a key inflation report, while the euro languished near recent lows, News.Az reports citing Investing .
At 04:15 ET (08:15 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded largely unchanged at 102.684, close to seven-week highs hit earlier this week.
CPI data looms large
The dollar is trading in a tight range Thursday, but remains at elevated levels in the wake of Friday’s strong payrolls report which prompted the market to largely rule out the chance of another 50 basis point cut in November.
The minutes of the Fed’s September meeting showed policymakers in full support of the central bank’s 50 basis point cut then, but they also remained uncommitted over the pace of future easing.
“Reading through the September FOMC minutes, there seemed no sense of urgency from the Fed to get rates lower – even though it did cut by 50 bps,” said analysts at ING, in a note. “More a sense that the inflation scare was over, unemployment was drifting higher and a risk management approach required a recalibration of policy.”
The focus was squarely on the consumer price index due later in the day, which is likely to factor into the Fed’s plans for interest rates. The data is expected to show headline CPI inflation eased slightly, while core CPI remained sticky.
Traders were seen pricing in a 79.5% chance for a 25 bps cut in November, and a 20.5% chance for a hold, CME Fedwatch showed.
At 04:15 ET (08:15 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded largely unchanged at 102.684, close to seven-week highs hit earlier this week.
CPI data looms large
The dollar is trading in a tight range Thursday, but remains at elevated levels in the wake of Friday’s strong payrolls report which prompted the market to largely rule out the chance of another 50 basis point cut in November.
The minutes of the Fed’s September meeting showed policymakers in full support of the central bank’s 50 basis point cut then, but they also remained uncommitted over the pace of future easing.
“Reading through the September FOMC minutes, there seemed no sense of urgency from the Fed to get rates lower – even though it did cut by 50 bps,” said analysts at ING, in a note. “More a sense that the inflation scare was over, unemployment was drifting higher and a risk management approach required a recalibration of policy.”
The focus was squarely on the consumer price index due later in the day, which is likely to factor into the Fed’s plans for interest rates. The data is expected to show headline CPI inflation eased slightly, while core CPI remained sticky.
Traders were seen pricing in a 79.5% chance for a 25 bps cut in November, and a 20.5% chance for a hold, CME Fedwatch showed.
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