Dollar Holds Steady at 99 Markets Await US PPI
The US dollar index held steady around the 99.9 level during Thursday's trading (August 13) following high volatility in the previous session. Investors are now turning their attention to US producer inflation data—or the Producer Price Index (PPI)—for July to gain further insight into the direction of price pressures.
CPI data released on Wednesday showed US consumer inflation slowing for the second consecutive month to an annual rate of 3.4%, while the monthly increase was just 0.1%. These figures eased pressure on the Federal Reserve to raise interest rates immediately.
Markets now estimate the probability of a 25-basis-point rate hike in September at around 40%, down from nearly 50% the previous day. This drop in probability has made it difficult for the dollar to gain fresh upward momentum, although it remains close to the psychological 100 level.
On the geopolitical front, investors continue to monitor prospects for the reopening of the Strait of Hormuz. However, escalating rhetoric between the US and Iran amidst stalled negotiations has diminished the likelihood of a near-term agreement.
Market attention is also focused on the Japanese yen, which is once again approaching the 160-per-dollar level. This situation has fueled speculation that Japanese authorities might intervene again if the yen's depreciation persists.
Newsmaker Analysis: The DXY is currently in a "wait-and-see" phase ahead of the PPI release. PPI data coming in hotter than expected could revive the chances of a Fed rate hike and push the dollar past the 100 mark. Conversely, a cooling PPI could weigh on the dollar, lower yields, and provide additional support for gold. (asd)*
Source: Newsmaker.id
