USD Slips Ahead of US Inflation Data Release

 The U.S. dollar traded slightly lower ahead of the release of U.S. inflation data that is expected to influence the Federal Reserve (Fed) in determining a timeline on stimulus easing.

Against a basket of major currencies, the depreciating dollar index traded around 92.52 after recording a 0.1% decline at the beginning of the session.

Ahead of the Fed’s policy meeting next week, investors will pay more attention to the U.S. consumer price data that will be released tonight.

The consumer price index (CPI) is expected to rise 5.3% in August, and core inflation is projected to rise 4.2%. Although it is expected to show a decline but price pressure is still high.

The euro maintained its gains by trading above 1.1800 against the greenback. The number of Covid-19 cases continued to show an increase, while the European Central Bank (ECB) was seen to be unchanged despite rising inflation.

Most recently, ECB policymaker Francois Villeroy reiterated his view that the recent surge in inflation in the European Zone is temporary.

Meanwhile, the Aussie dollar fell to a two -week low after being pressured by a statement by Governor Philip Lowe who said interest rates would not be raised before 2024 due to slower wage growth.

On the other hand, the Canadian dollar remained stable with support from the strengthening of higher crude oil prices following the continued supply threat in the US following the hurricane that hit the US Gulf affecting oil production operations.

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