The U.S. dollar steadied below a 2-1/2-week high that was hit in the previous session, as investors braced for inflation data that might offer clues on the timing of policy tightening by the Federal Reserve at a meeting next week.
Before the Federal Reserve’s policy review on Sept 21-22, investors are looking closely at U.S. consumer price data due at 1230 GMT. Economists expect core consumer price inflation (CPI), an index which strips out volatile energy and food prices, to have risen 0.3% in August from July.
Long dollar bets have climbed rapidly in recent weeks, last week hitting the highest levels since March 2020, as rising inflation prints have raised bets that policymakers will withdraw COVID-19 pandemic-era stimulus earlier than expected.
Against a basket of its rivals, the dollar index steadied at 92.59, having retreated from 92.887, which it hit on Monday. The euro changed hands at $1.1815, having bounced back from Monday’s low of $1.17705, its lowest since Aug. 27.
Currency markets were in a quiet mood in early Tuesday trading, with a gauge of broader market volatility holding near its lowest levels for 2021.
In cryptocurrencies, bitcoin dropped to as low as $43,400, its lowest in almost a week, and last stood at $45,395 . Ether changed hands at $3,307.
Reference: Reuters
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