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The dollar edged lower on Wednesday, ahead of U.S. inflation data which markets will scrutinise for guidance on how steeply the U.S. Federal Reserve will raise interest rates.
The figures were due at 1230 GMT. Economists expect year-on-year headline inflation to be running at a scorching 8.7 percent, a small retreat from June’s 9.1 percent.
Core inflation is expected at 0.5 percent month-on-month There were a few small ripples in the pre-CPI calm in morning trade in Europe. The euro climbed 0.28 percent to $1.02425, sterling gained 0.17 percent to $1.2095, and the dollar also lost 0.5 percent on the Swiss franc, which traded at 0.94885 per greenback.
But the day’s main event had yet to come. A strong U.S. inflation print would damage the case that the Fed will pivot away from its focus on curtailing inflation with interest rate hikes and instead worry more about a recession, and so potentially raise rates more slowly. – Reuters
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