Dollar Steady; CPI Key for Fed Outlook
The US Dollar Index held steady around the 99.7 level during Tuesday's trading (August 11). The dollar maintained gains from the previous session as investors awaited fresh clues regarding the Federal Reserve's interest rate policy direction.
Market focus is primarily on US CPI data due Wednesday, followed by PPI data on Thursday. These figures will reveal whether inflationary pressure remains elevated following July's labor market report, which showed signs of weakness.
Markets currently price in a roughly 51% probability of a 25-basis-point Fed rate hike in September, up from 44% the previous day, signaling a resurgence in expectations for a hawkish policy stance.
This sentiment was reinforced by comments from Cleveland Fed President Beth Hammack, who suggested that further rate hikes might still be necessary to steer inflation back toward the 2% target.
Geopolitical uncertainty in the Middle East remains a concern. The lack of clarity regarding a US-Iran deal and the reopening of the Strait of Hormuz keeps oil price risks elevated, meaning fears surrounding energy-driven inflation have not fully dissipated.
Newsmaker Analysis: The DXY remains in a consolidation phase below the psychological 100 level. If CPI figures exceed forecasts, the likelihood of a rate hike could increase, potentially pushing the dollar above the 100 mark. Conversely, softer CPI data could weigh on the dollar while providing support for gold and other major currencies. (asd)*
Source: Newsmaker.id
