The US dollar marginally fell against major global currencies Thursday to hover around a two-week low, ahead of the eagerly awaited US inflation data that could indicate the Federal Reserve’s move on interest rates.
The dollar index, which measures the US currency against six rivals, edged down 0.2% to 105.5 as of 10:45 am GST, after reaching an 11-month high earlier this month.
The euro—the biggest component in the dollar index—was up 0.2% at $1.064 around the same time, while the Australian dollar marginally moved up 0.2% to $0.643 against the greenback.
Sterling inched up 0.1% against the dollar to $1.231 as of 10:45 am GST.
The minutes of the US Federal Reserve meeting held on September 19 and 20, released Wednesday, revealed that officials expressed uncertainty about the US economic outlook. Also, the Fed officials have cited bond yields as a reason that may allow them to end the rate hike cycle, according to a Reuters report.
The US benchmark 10-year yield marginally dipped 0.05% to 4.5% Thursday, from 16-year highs in recent weeks.
Investors are also cautious after the mixed report on US producer prices, which rose more than expected at 0.5% in September, but down from 0.7% in the previous month, due to higher energy costs.
The core producer price index (PPI), which excludes volatile food, energy prices, and trade services, rose 0.2% in September for the second straight month.
“This (PPI data) is a reminder that the last mile of the fight against inflation is going to be a tough one,” Ryan Brandham, head of global capital markets, North America at Validus Risk Management, told Reuters.
Similarly, the US inflation data will be released later in the day, and a likely fall will support the case for the Fed to end its tightening cycle, thereby pulling down US yields and the dollar, Carol Kong, a currency strategist at Commonwealth Bank of Australia, was quoted .
However, the Japanese yen was down against the dollar by 0.04% to 149.09 per dollar. The markets consider the 150 yen per dollar as a level that could potentially prompt intervention from Japanese authorities, similar to last year.
