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08/07/24
101
USD Flat Before Key Inflation Data
On Monday, the U.S. dollar steadied in early trade in Europe before key inflation data.
The U.S. dollar index, which measures its strength against 6 other major currencies, largely traded flat at 104.577, as it consolidated after a slump of nearly 1% last week.
The dollar has stabilized at the beginning of a new week after being on the back foot due to Friday’s unexpectedly soft U.S. payrolls data, which bolstered bets for the Federal Reserve to start reducing interest rates soon.
According to the CME Group’s FedWatch Tool, traders currently expect about a 76% chance for a rate cut at the Sept. meeting of the Fed, up from 64% the prior week.
This week, there will be more indications about the likely path of U.S. interest rates, with the release of crucial consumer inflation data and testimony by Federal Reserve Chair Jerome Powell before both the House of Representatives and the Senate.
Analysts at ING said in a note that this week will be hot for U.S. macro, with the June CPI report due on Thursday. They expected the core number at 0.2% m/m, as per the consensus, which should be enough to lead to markets keep on betting on a rate cut in September.
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