Dollar Stabilizes Ahead of Critical Inflation Report
The US Dollar (USD) has stabilized in early European trading on Friday after experiencing gains against its rivals on Thursday. Market participants are now focusing on the August Consumer Price Index (CPI) data from the United States, which could influence expectations of the Federal Reserve's next policy move.
Ahead of this key release, the USD Index is moving sideways near 99.00, while US stock index futures have risen about 0.4%. Analysts at Commerzbank are sticking to their forecast of unchanged US key interest rates, citing 'massive uncertainty' surrounding this prediction.
The bank argues that if progress toward the 2% inflation target suffers a setback in August, an interest rate hike would help steer the inflation rate back on track. However, they conclude that the base scenario is still a Fed pause next week and confirmation of the target range at 3.50-3.75%.