Dollar slips from 18-month high as oil prices fall, inflation data in focus
TLT•The dollar index fell 0.25% to 102.27 on Tuesday after reaching a 18-month high on Monday, as oil prices retreated and investors awaited US inflation data due Wednesday. Traders priced an 80% chance the Federal Reserve will hold rates at its October meeting.
1. Dollar eases
The dollar slipped from an 18-month high as oil prices retreated and investors reassessed the AI-fueled rally supporting demand for US assets. Oil fell 0.86% to $105.75 a barrel, while the dollar index dropped 0.25% to 102.27 after touching 102.61 on Monday.
2. Inflation and Fed outlook
Investors awaited September US Consumer Price Index data due Wednesday for clues on the Federal Reserve’s rate path. Traders saw about an 80% chance the Fed would leave rates unchanged at its October 27-28 meeting, up from 51% a month earlier, and priced in about 75 basis points of tightening by late 2027.
3. Other currencies move
The euro rose 0.3% to $1.1189 after reaching a roughly 17-month low on Monday, despite higher European gas prices and persistent concerns over France’s fiscal outlook. The yen strengthened 0.15% to 158.38 per dollar after Japanese wholesale prices rose 6.8% in the year to September, below the 7.6% median forecast.
