Dollar Rises as US CPI Meets Expectations, Rate Hike Odds Trimmed

The US dollar has gained strength after the release of July's consumer price inflation data, which met economists' expectations. The dollar index rose by 0.17% to 99.98, with the euro down 0.14% at USD 1.1524.

Traders had trimmed their bets on a rate increase at the Federal Reserve's September meeting following the unexpected decline in jobs in July. Fed funds futures traders are now pricing in 40% odds of a September rate hike, down from 44% before Wednesday's data and from 55% a week ago.

The greenback has been boosted by higher oil prices as discussions to open the Strait of Hormuz continue. Oil prices steadied in volatile trading on Wednesday after forecasters cut projections for 2026 global oil demand.

Markets will be watching Thursday's producer price inflation data and Friday's retail sales figures, which should offer further insight into both inflation trends and the broader health of the US economy.