Dollar Steady as Inflation Data Looms, Traders Split on Fed Rates

The US dollar held steady as markets awaited inflation data for clues on Federal Reserve interest rates. The US dollar index, which measures the greenback's strength against a basket of six currencies, was up 0.1% at 99.89.

Currency markets remained anxious about the release of inflation data later in the day, as traders remain split on the Fed's next move. Fed funds futures imply a 50% chance the central bank will leave rates unchanged at its two-day meeting ending September 16, versus the same probability of a quarter-point increase.

The Australian dollar was down 0.1% at $0.7056 and the kiwi dollar was 0.3% weaker at $0.5866 after New Zealand Prime Minister Christopher Luxon said he had won a confidence vote of ruling party lawmakers. The main focus for markets this week is on the release of US inflation data, as last week's softer-than-expected jobs report did little to dispel doubts.