The U.S. dollar edged higher Friday in subdued trading ahead of the release of key inflation data, which could provide cues on the full extent of the Federal Reserve’s rate-cutting cycle.
At 04:20 ET (08:20 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher to 98.825, on track for a weekly gain of around 0.6%.
Dollar edges higher
The U.S. consumer price index report for September is expected to be released later in the session, having been delayed as a consequence of the government shutdown, and is likely to play a key role in shaping expectations for Federal Reserve monetary policy this year.
Economists expect a 0.4% increase for the headline number and a 0.3% rise in the core figure month-on-month.
The Fed is widely expected to cut rates next week by 25 basis points, but this release could provide cues on what the central bank might do in its December meeting.
“Despite tariff-led price pressure in some sectors, there are indications that airfares, hospitality and housing should be a drag on the CPI basket,” said ING analyst Francesco Pesole. “With headline and core close to 3.0%, the Fed can cut and signal more easing ahead when it meets next week. But markets are fully pricing in 50bp by year-end, and without any jobs data at hand, it will be hard to speculate much beyond the December meeting.”
