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Dollar index hovers near 100.50 as Fed hike bets cool

The US PPI fell 0.3% in June, reinforcing expectations that Fed rate hikes may not extend as far as traders previously priced.

Reported · Written up by our desk · Major Pairs

The US Dollar Index, which tracks the greenback versus a basket of currencies, was consolidating around 100.50 during the Asian session, near a nearly four-week low hit the prior day, according to FXStreet.

FXStreet said receding expectations for additional US Federal Reserve rate hikes have weighed on the dollar, even as energy related inflation fears and renewed US Iran tensions have limited further downside.

On the data front, the report cited a Wednesday release showing the US Producer Price Index fell 0.3% in June versus a revised 0.6% rise in the prior month, alongside a softer US CPI report the day before, both of which eased concerns about rates staying higher for longer.

Still, FXStreet noted that bets for at least one further 25 basis point Fed hike remain on the table, while geopolitical developments involving potential disruptions to oil and key shipping routes keep a risk premium supported and factor into FX positioning ahead of more US releases later Thursday.

Latest closeDollar index 100.50 ▼0.4%

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