Dollar Steady Amid Inflation Report Jitters
The US dollar remained steady on Tuesday as traders awaited the highly anticipated consumer inflation report for July. The report, set to be released on Wednesday, is expected to shape near-term expectations for Federal Reserve policy.
Traders trimmed their bets on a September Fed hike after last week's jobs report showed unexpected payrolls cuts. A resurgence in inflation could revive those hike bets as the central bank continues to battle price pressures above its 2% annual target.
Rising oil prices, driven by an elusive deal to reopen the Strait of Hormuz, have reignited concerns over renewed inflationary pressure. However, energy prices remain well below their recent highs.
Fed funds futures traders are pricing in 48% odds of a Fed September rate increase, down from 58% a week ago.