Dollar Steady Amid Softer US Inflation Data

The US dollar remained stable against its major peers on Wednesday following a smaller-than-expected increase in inflation data. The Personal Consumption Expenditures Price Index, the Federal Reserve's preferred inflation gauge, rose 0.3% in August, less than the forecasted 0.4%. This softer-than-expected print caused bonds to rally and yields to fall, which in turn weakened the dollar.

John Velis, FX and macro strategist at BNY, noted that it's unclear whether the revised PCE data or other factors were responsible for the softer print. He added that the long end of the yield curve has gone back up, while the front end is still lower, resulting in a steeper curve.

The dollar index was flat at 101.47, but remains on track to post a monthly gain in September. The euro was also stable at $1.133050, and is set for a monthly loss against the dollar after two consecutive months of gains.