Dollar Holds Steady as Focus Shifts to U.S.โฃ Inflation Data, ECBโ 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 mayโ lie with ECB President โChristine Lagarde.After all, she sounded surprisingly hawkish at the last two press conferences,” the โanalysts wrote in a note. โThey added that, with a rate cut not anticipated โคuntil next June, Lagarde is unlikely to reveal her strategy at this time.
Market attention is heavily focused on the Federal Reserve’s anticipated โคrate cut trajectory. Traders widely expect theโ Fed to ease monetary policy, with the primary question being the extent โof the cuts. The โฃCME Group’s FedWatchโ tool indicates anโ 8.9% probability of a 50 basis point (bps) rate cut at the September 16-17 meeting, and a 25โ bps cut is considered almost certain.
Politicalโข developments surrounding the Fed are also in โfocus.President Donald Trump’s governance is appealing a federal judge’s ruling that temporarily blocked his attempt to remove Federal Reserveโ 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 wasโ up 0.2% at 147.80 yen, following data revealing a 2.7% increase in Japaneseโข 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 โcommodity prices declined.โค The โขoffshore yuan strengthened to 7.1216 yuan โฃper dollar, up 0.04%, while the kiwiโ slipped 0.2% to $0.59290. Sterling traded downโ 0.1% to $1.35195.