The US Dollar Index held flat at 100.03 on Thursday after in-line July CPI data trimmed the odds of a September Fed rate hike to around 40%. The yen stayed pressured near a two-week high against the dollar, while stalled US-Iran talks kept oil elevated. Elsewhere, the Australian dollar slipped 0.2%.
The US Dollar Index traded flat at 100.03 on Thursday, holding onto a 0.2% gain from the previous session, as investors weighed the Federal Reserve's rate outlook following an in-line US inflation report.
Fed rate-hike odds slip after CPI matches forecasts
US consumer prices rose 0.1% in July, matching economists' expectations, while annual inflation eased to 3.4% from 3.5% in June. Core CPI rose 0.2% month-on-month and 2.5% from a year earlier. The report pulled market-implied odds of a September rate hike down to around 40% from 54% before the data landed.
MUFG analysts said the print should let the Federal Reserve hold steady at the September meeting but is probably not enough to shift its stance further. Still, the dollar stayed supported as traders awaited more signals on the central bank's policy path. Markets now turn to US producer prices and retail sales for further clues on the Fed's next move.
Yen pressured near a two-week high
The Japanese yen stayed under pressure, with the USD/JPY pair flat near a two-week high at 159.40. Traders kept watching the pair after Tokyo and Washington confirmed coordinated yen-buying intervention earlier this month to halt the currency's slide to 40-year lows.
Oil stays elevated as Iran-US talks stall
Investors also monitored stalled US-Iran peace efforts, after Iran said there had been no progress reviving an interim deal with Washington. The US has accused Tehran of failing to honor commitments to reopen a key shipping route, while Iran says Washington has not met its own obligations.
The standoff kept Brent crude around $89 a barrel, raising concerns over imported inflation across Asia. Elsewhere, the AUD/USD pair fell 0.2%.
Source: Investing.com
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