US Dollar Holds Steady Following CPI Release
The US Dollar (USD) remained relatively unchanged on Wednesday following the release of the US Consumer Price Index (CPI) data for August. While the headline CPI came in lower than expected, the monthly core inflation ticked up slightly, surprising markets and reducing expectations for a larger-than-expected rate cut by the Federal Reserve (Fed) next week.
Focus Shifts to ECB Monetary Policy
With the economic data for Wednesday released, investors are now turning their attention to the European Central Bank (ECB) meeting on Thursday. The ECB's decision on interest rates and the accompanying message from Chairman Christine Lagarde will be closely watched.
Market Highlights
- Presidential Debate: A CNN poll found that 63% of viewers believed Vice President Kamala Harris won the presidential debate.
- Mortgage Applications: Weekly mortgage applications increased slightly according to the Mortgage Bankers Association.
- CPI Data: The US CPI for August showed a decline in headline inflation but an increase in core inflation.
- Fed Rate Expectations: The CME Fedwatch Tool continues to show a higher probability of a 25 basis points (bps) interest rate cut by the Fed next week.
- US Equities: US stock markets are mixed, with the Dow Jones down and the S&P 500 slightly lower.
- US 10-Year Treasury Yield: The US 10-year benchmark rate is trading near its 15-month low.
US Dollar Technical Analysis
The US Dollar Index (DXY) is currently trading within a range between 101.90 and 100.62. The index is awaiting further clarity on the Fed's interest rate cut decision. A break above 101.90 could lead to further gains, while a break below 100.62 could signal a potential downtrend.