Dollar Steady Ahead of July US Inflation Data, Hawkish Fed Comments

US Dollar traders are watching inflation data and Fed rhetoric closely ahead of the July US Consumer Price Index (CPI) report. Consensus expects a 0.1% month-over-month increase in headline CPI, with the annual rate easing to around 3.4% from 3.5% in June.

Chicago Fed President Austan Goolsbee emphasized inflation as the biggest problem facing the US economy right now, while Atlanta Fed interim President Cheryl Venable also struck a hawkish tone, citing high inflation and the ongoing Middle East conflict as concerns.

Fed funds futures are pricing in a 48% probability of a September rate hike, with a total increase of 29 basis points by year-end. The Dollar Index remains steady near 99.83, while EUR/USD holds around 1.1540.