The US dollar was relatively stable on Thursday and remained near recent lows as investors awaited consumer price data that could set the tone for the Federal Reserve’s next meeting. The greenback has been under pressure since last week’s weak jobs report.
Wednesday’s producer price data surprised to the downside, falling 0.1% in August against expectations of a 0.3% increase. The decline was driven by lower margins in wholesale trade, offsetting modest gains in goods prices. The release reinforced the view that price pressures may be transitory, echoing recent comments from Fed officials and adding to the case for further policy easing.
Treasury yields remained steady, with the 10-year note holding above 4%, reflecting investor caution ahead of the CPI release. Core inflation is expected to remain at 0.3% month-on-month, while headline CPI is seen rising slightly to 0.3%. Softer numbers could drag yields lower and weigh further on the dollar, while firmer readings might provide temporary support without overturning expectations of near-term cuts.
Political uncertainty continues to erode confidence in US assets. The Trump administration said it will appeal a ruling that temporarily blocked the dismissal of Fed Governor Lisa Cook, while dovish nominee Stephen Miran advanced in the Senate confirmation process.
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