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The dollar held near a four-month high against its major peers on Thursday after falling overnight as a cooling in consumer inflation tempered bets on an earlier monetary policy tightening American.
The dollar index, which measures the greenback against a basket of six rivals, was little changed at 92.890, after falling 0.19% from Wednesday, when it hit 93.195, an all-time high. since April 1.
The consumer price index rose 0.5% last month, in line with economists’ estimates, but down from the 0.9% advance in June.
Inflation eased in some areas where Fed policymakers had indicated price pressures would likely be temporary, such as used cars.
The Fed has made the recovery in the labor market a condition for phasing out its asset purchase program and raising interest rates, while generally viewing current inflationary pressures as transitory, although there has been a debate on the duration of these pressures.
The Fed is “likely to take comfort” from the CPI report, David de Garis, an analyst at the National Australia Bank, wrote in a note to clients.
“For now, the focus is more fully on the rate of improvement in the state of the labor market.”
The euro was little changed at $ 1.1740, after falling from a four-month low to $ 1.1706 on Wednesday, bringing it down to just two-tenths of a cent from the lowest level since early November.
The dollar eased 0.07% to 110.355 yen, continuing to retreat from a five-week high of 110.80 reached overnight.
However, many analysts still expect the Fed to announce a cut in stimulus this year, potentially as early as next month.
Kansas City Fed President Esther George said on Wednesday that the standard for reducing the bond purchase program may have already been met by the current surge in inflation, recent improvements in the market. work and the expectation of continued strong demand.
Dallas Fed Chairman Robert Kaplan in an interview with CNBC said the US central bank is expected to announce its schedule to cut massive bond purchases next month and start cutting them in October.
In an interview with Reuters, Richmond Fed Chairman Thomas Barkin said it might take a few more months for the U.S. labor market to recover enough for the Fed to start cutting back its support. to the economy.
“The general consensus among FOMC members right now is that the time to cut asset purchases is approaching,” Kim Mundy, Commonwealth Bank of Australia strategist, wrote in a research note.
“Rising expectations of a near-term reduction may support the USD.”
Mundy expects a cutback announcement in September if employment data for August remains strong.
Elsewhere, bitcoin traded around $ 45,800 after hitting $ 46,787.60 on Wednesday, the highest since mid-May.
The smaller rival Ether stood at around $ 3,200 after hitting $ 3,279.99 overnight for the first time since May 19.
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