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Dollar steadies ahead of July CPI as Fed rhetoric stays hawkish

EUR/USD hovered near 1.1540, while Fed funds futures priced about a 48% chance of a 25 basis point September hike.

Reported · Written up by our desk · Major Pairs

Commerzbank analysts said investors are taking a cautious stance on the US dollar ahead of the July CPI release, with the Dollar Index steady around 99.83 and EUR/USD near 1.1540.

According to FXStreet, Fed funds futures are pricing roughly a 48% probability of a 25 basis point hike in September, along with a total increase of 29 basis points by year end.

The outlook is being shaped by hawkish remarks from Fed officials, including Chicago Fed President Austan Goolsbee, who said inflation is the biggest problem and described the labor market as stable but not improving meaningfully.

Atlanta Fed interim President Cheryl Venable added that inflation remains too high and linked any meaningful easing to the Middle East conflict, noting that resolving the war could ease energy prices while prolonged conflict could do the opposite.

Latest closeEUR/USD 1.155 ▼0.1%|Dollar index 99.81 ▲0.0%

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