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Dollar steadies near 99 as traders await US CPI and ECB decision
Money markets are fully pricing a 100.0% chance of a quarter-point ECB rate hike, while investors also watch upcoming US PPI and CPI reports.
Forex markets stayed subdued, with the US Dollar holding close to 99.0 on Tuesday, according to FXStreet, as measured by the US Dollar Index (DXY). The index was around 98.82 and FXStreet noted it is forming a doji candlestick, a sign of trader indecision.
FXStreet said geopolitics in the Middle East, a jump in energy prices, and rising US yields have put inflation data at the center of focus, with most investors looking to Thursday and Friday's US PPI and CPI releases. The Wednesday calendar includes ADP Employment Change 4-week Average, while a light docket ahead of the US data also features ECB President Christine Lagarde.
EUR/USD finally broke above 1.1600 as the dollar softened, FXStreet added, ahead of the ECB monetary policy meeting on Thursday. FXStreet reported that money markets are pricing in a 100.0% chance of a quarter-point rate hike, with traders also set to monitor Lagarde's remarks.
Other major pairs were mixed: FXStreet said GBP/USD rose to 1.3561 before easing to around 1.3539 following comments from Bank of England officials, and USD/JPY continued to weaken after suspected Japanese intervention, falling below 153.00 at one point before recovering. FXStreet also flagged attention on Japan's Machine Tool Orders and said AUD/USD rose after comments from RBA Deputy Governor Hauser about debating whether to raise rates at the next meeting.
Latest closeEUR/USD 1.159 ▼0.1%|USD/JPY 158.82 ▼0.9%|GBP/USD 1.348 ▼0.2%