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11.08.202601:27:28UTC+00Dollar Steadies as Traders Weigh Fed Outlook

The dollar index was little changed around 99.7 on Tuesday, consolidating the previous session’s gains as investors evaluated the Federal Reserve’s policy outlook ahead of key US inflation data and in the wake of a soft July jobs report. The closely watched consumer price index is due on Wednesday, followed by producer price data on Thursday. Futures markets now imply roughly a 51% probability of a 25-basis-point Fed rate hike in September, up from about 44% the day before. Cleveland Fed President Beth Hammack indicated that multiple additional rate increases may still be required to bring inflation back to the Fed’s 2% target. At the same time, ongoing uncertainty surrounding a possible agreement between the US and Iran to end the war and reopen the Strait of Hormuz kept investors cautious about inflation risks and the trajectory of interest rates.

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