US Dollar Stabilizes Ahead of Key Economic Data Releases
The US Dollar stabilized on Thursday ahead of key economic data releases in the United States. The weekly Initial Jobless Claims and Producer Price Index (PPI) for July will be closely watched by investors. Despite a decline in annual inflation to 3.4% in July, the Consumer Price Index (CPI) rose by 0.1% on a monthly basis.
The US Dollar Index registered small losses on Wednesday before entering a consolidation phase at around 100.00. Analysts at Deutsche Bank note that markets focused on the benign headline of the CPI print, with the probability of a September Fed hike slipping to 40% from 48%. However, they maintain their call for a Fed rate hike in September.
The UK's GDP expanded at an annual rate of 1.2% in the second quarter, slightly better than market expectations. Industrial Production and Manufacturing Production in the UK contracted by 0.2% and 0.5%, respectively, on a monthly basis in July. The GBP/USD edged slightly lower following these mixed data releases.
Gold regained its traction and held slightly above $4,400 at the end of Wednesday's trading session. Crude Oil prices remain flat early Thursday as uncertainty in the Middle East persists, with the US and Iran offering conflicting claims regarding the activity in the Strait of Hormuz.