Dollar eases as investors await CPI data, Fed speakers
TLT•The dollar index fell 0.05% to 102.15 as investors awaited U.S. CPI data and comments from Federal Reserve policymakers. Economists expect September inflation to rise 0.6% month on month and 3.6% year on year.
1. Dollar retreats
The dollar fell further from 18-month highs against the euro on Wednesday as investors awaited U.S. inflation data and Fed speakers for clues on the pace of monetary tightening. Treasury yields ticked lower, while the euro rose 0.06% to $1.1205 and sterling gained 0.08% to $1.3265.
2. Inflation and Fed outlook
Economists expect the consumer price index to have risen 0.6% in September after a 0.4% increase in August, with annual inflation accelerating to 3.6% from 3.4%. Traders see a 78% chance the Fed will leave rates unchanged at its October 27-28 meeting, up from 53% a month ago. Fed officials Thomas Barkin and Michelle Bowman were due to speak, and the central bank was scheduled to publish its monthly Beige Book.
3. Eurozone pressures
European Central Bank President Christine Lagarde said France should address its debt problems through fiscal consolidation, damping speculation that the ECB might buy French bonds to contain yields. French borrowing costs and higher energy prices have weighed on the euro, which touched a 17-month low against the dollar this week.
