The dollar index held steady around 103.1 on Tuesday as traders refrained from making big bets ahead of key US inflation figures this week that could confirm whether price growth has continued to stabilize. US producer inflation data will be released later on Tuesday and consumer inflation figures will follow on Wednesday. US retail sales numbers are also slated for Thursday.
Meanwhile, Fed Governor Michelle Bowman said over the weekend that despite softer inflation numbers for May and June, inflation remains uncomfortably above the FMC's 2% target. Markets have since dialed back bets on Federal Reserve rate cuts, seeing a higher chance of a 25 basis point reduction in September than a larger 50 bps cut.
Still, analysts expected over 100 bps of total Fed easing this year. The dollar was little changed against most major currencies, but continued to eke out gains on the yen as the unwinding of yen carry trades lost momentum.
Source: Treading Economics
