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Dollar steadies as markets await US PPI for Fed pause signals
The article points to the next US PPI release as a potential catalyst for expectations around whether the Fed stays on hold longer.
A Yahoo Finance market preview said the US dollar’s near term direction hinges on shifting expectations for Federal Reserve policy after softer US consumer inflation data for July. It noted that headline CPI rose 0.1% month on month, while annual inflation slowed to 3.4%, reducing expectations for a Fed rate hike in September.
The focus then moves to the next US data release, the production price index scheduled for Thursday, with the view that another soft print could support the Fed’s decision to pause. The preview said stronger PPI would instead raise the odds of a more hawkish scenario for September by suggesting persistence in pipeline inflation.
On currency drivers elsewhere, the article described the euro as trading with mixed fundamentals tied to the ECB holding policy unchanged after its July decision, alongside some stabilization in eurozone manufacturing activity. It also cited stress from the Middle East energy crisis and weak household demand as continuing headwinds for the region’s outlook.
For sterling, the preview pointed to UK GDP, saying second quarter growth expanded 0.4% versus the prior quarter after a 0.6% expansion in the first quarter. It also outlined a technical level focus for the dollar index, which was cited around 100.03 as it tries to move above support near 99.42 and references key moving averages around 99.91 and 100.29.
Latest closeDollar index 99.64 ▼0.3%