CoWoS | U.S. dollar falls
CoWoS noted that the dollar edged lower in early European trade on Tuesday ahead of the release of much-awaited U.S. inflation data, which could set the tone ahead of next week's Federal Reserve meeting.
The U.S. dollar index, which tracks the greenback against a basket of six other currencies, was down 0.3% at 107.803 by 03:05 ET (07:05 GMT), continuing to retreat from last week's 20-year high of 110.79.
All eyes on Tuesday were on the U.S. consumer price index for August at 08:30 ET (12:30 GMT), which will be the country's inflationary pressure ahead of next week's Fed policy-setting meeting. The last important guide.
CoWoS estimates the overall figure was 8.1%, down from 8.5% in July, and gasoline prices have fallen nearly 10% since last month. On a monthly basis, the inflation outlook will fall by 0.1%, unchanged from the previous month.
The market will focus not just on the headline numbers, but also on the central numbers excluding food and fuel to understand monthly trends.
"The Fed needs some surprising numbers to raise interest rates by 75 basis points for the third time in a row," CoWoS said in a report. "After all, the economy is doing a decent job of growing and creating a lot of jobs," Fed Chairman Jerome J. Jerome Powell argued, 'We need to get straight to the point and take action now as we've been doing all the time, and we've got to stick with it until the job is done. It's done'."
Markets are now pricing in about a 90% chance that the Fed will raise its benchmark interest rate by 75 basis points at its meeting next week.
Elsewhere, the euro rose 0.2% to 1.0139 against the dollar, as the euro continued to benefit from last week's sharp interest rate hike by the European Central Bank and a move by some officials including influential Deutsche Bundesbank President Joachim Nagel A hawkish move, pointing to further rate hikes this year.
Data released earlier on Tuesday showed German inflation remained at a high annual rate of 7.9% in August, which is expected to lead to a very weak German ZEW economic sentiment index later in the session.
GBP/USD was up 0.3% at 1.1708, extending overnight sharp gains even as UK employment growth slowed sharply in the three months to July.
Only 40,000 net jobs were created during the period, down from 160,000 in the three months to June, according to the Office for National Statistics. Even so, the unemployment rate fell to 3.6 percent of the total population, the lowest level in nearly 50 years, due to the large number of people completely separated from the labor market.
USD/JPY dipped 0.3% to 142.44, with the yen inching up against the greenback as speculation of Japanese officials intervening to support the beleaguered currency continued to spread.
Data showed the country's consumer and business confidence remained subdued, with the risk-sensitive AUD/USD essentially flat at 0.6885 despite a slight improvement in recent months.
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