Dollar Steadies as Traders Weigh Fed Outlook Ahead of Inflation Readings

The US dollar steadied around 99.7 on Tuesday, holding onto gains from the previous session as investors assess the outlook for Federal Reserve monetary policy.

This comes ahead of key US inflation readings, with the consumer price index report due on Wednesday and producer inflation data on Thursday.

Markets are currently pricing in a 51% chance of a 25 basis point Fed rate hike in September, up from 44% a day earlier.

Cleveland Fed President Beth Hammack said several rate increases may be needed to bring inflation back down to the central bank's 2% target.