US Dollar Holds Higher Ahead of CPI Data
The dollar index held steady around 106.3 on Wednesday, after three straight days of gains, as investors braced for a crucial US inflation report that could have a significant impact on Federal Reserve policy.
A higher-than-expected inflation reading could delay the Fed’s plans to reduce borrowing costs, potentially supporting the US dollar.
That said, markets are currently pricing in an 86% chance of a 25 basis point rate cut by the Fed later this month, although the outlook for 2025 remains highly uncertain.
Traders are also eyeing interest rate decisions from the Bank of Canada and the European Central Bank later this week, both of which are widely expected to implement further rate cuts.
Additionally, investors are keeping an eye on developments from China’s Central Economic Work Conference, especially after Beijing recently pledged additional monetary support.
Source: Trading Economics
