Dollar Holds Steady as Focus Shifts to U.S. Inflation Data, ECB Meeting
The dollar remained stable Thursday as traders braced for the release of key U.S. inflation data and awaited the outcome of the European Central Bank (ECB) meeting.Commerzbank analysts anticipate limited market movement following the ECB meeting, suggesting no new policy signals are expected.”If anything, hopes may lie with ECB President Christine Lagarde.After all, she sounded surprisingly hawkish at the last two press conferences,” the analysts wrote in a note. They added that, with a rate cut not anticipated until next June, Lagarde is unlikely to reveal her strategy at this time.
Market attention is heavily focused on the Federal Reserve’s anticipated rate cut trajectory. Traders widely expect the Fed to ease monetary policy, with the primary question being the extent of the cuts. The CME Group’s FedWatch tool indicates an 8.9% probability of a 50 basis point (bps) rate cut at the September 16-17 meeting, and a 25 bps cut is considered almost certain.
Political developments surrounding the Fed are also in focus.President Donald Trump’s governance is appealing a federal judge’s ruling that temporarily blocked his attempt to remove Federal Reserve Governor Lisa cook before next week’s meeting. additionally, Stephen Miran’s nomination to become a Federal Reserve governor advanced in the Senate Banking Committee, though his confirmation before the upcoming meeting remains uncertain.against the yen, the dollar was up 0.2% at 147.80 yen, following data revealing a 2.7% increase in Japanese wholesale prices year-over-year in August, signaling persistent inflationary pressure. The Australian dollar decreased 0.1% to $0.66095, retreating from November highs as commodity prices declined. The offshore yuan strengthened to 7.1216 yuan per dollar, up 0.04%, while the kiwi slipped 0.2% to $0.59290. Sterling traded down 0.1% to $1.35195.
