Dollar languishes as focus turns to CPI, Fed speakers

According to Business Recorder, the dollar hovered near recent levels on Wednesday as investors looked for clearer guidance on when the Federal Reserve might raise rates to deal with stubborn inflation. The greenback had slipped from an 18-month peak reached in the previous session, helped by softer oil prices and a reassessment of the AI-driven rally that has drawn money into US assets.

The dollar index, which gauges the greenback against a group of major currencies, dipped 0.02% to 102.16 after a 0.35% fall on Tuesday. The euro edged up 0.04% to $1.1203 and held its gains even as French budget worries kept regional bond yields high. Sterling rose 0.03% to $1.3256 while the yen held steady near 158.32 per dollar.

Attention now turns to the US consumer price index for September, which is forecast to rise 0.6% month on month after a 0.4% gain in August, with annual inflation expected to climb to 3.6% from 3.4%. Fed speeches and the Beige Book are also due, while traders now put a 77% probability on rates staying unchanged at the October 27-28 meeting, compared with 51% a month earlier. Carol Kong, who follows currencies at Commonwealth Bank of Australia, said a stronger core reading could lift bets on an October Fed hike and strengthen the greenback.