USD Struggles Ahead of Inflation Data as Oil Prices Soar Past $100

The US Dollar (USD) struggled to gain traction on Thursday as inflation data loomed large. The Swiss Franc (CHF), meanwhile, gave back some of its earlier gains against the USD in a relatively calm session.

Oil prices have risen to levels above $100, sparking concerns about global yields and recession risks. This has led to a subdued appetite for risk, which is weighing on the USD ahead of the inflation data release.

The market is eagerly awaiting US Producer Price Index (PPI) figures, which are expected to show a 5.3% year-over-year increase in August, up from 4.7% in July. The core PPI is also forecasted to rise to 4.6% over the past 12 months.

DBS Group Research's Philip Wee noted that a hotter US inflation print would typically boost the USD, but with stronger US data, higher Fed hike odds, and elevated energy prices, there may be limited near-term gains for the currency.