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Dollar mostly flat as softer US data lifts dovish Fed bets
The euro slipped from a two-month high near $1.161, while market pricing for a September quarter-point hike moved toward about a 70% chance of a hold.
The U.S. dollar was mostly steady against major currencies on Tuesday, with investors increasingly pricing in a more dovish Federal Reserve response after softer US economic data, Reuters reported. The euro gave up ground after trading near two-month highs on Monday, easing to $1.1587, up 0.07% on the day. Recent indicators over the past few weeks have pointed to a weaker US economy, including unexpected job losses in July and mild inflation readings, which has reduced expectations for an additional interest rate hike. According to market pricing cited by Reuters, expectations for a September quarter-point move shifted, with the probability of a hold now near 70%. Reuters also noted that the dollar faced additional pressure after joint US and Japanese intervention aimed at strengthening the yen in late July. Sterling was also slightly higher against the dollar at $1.35420, just below a three-month peak hit in the prior session. Analysts, Reuters added, are watching inflation closely amid ongoing supply shock risks and the situation around the Strait of Hormuz, which remains effectively shut.
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