U.S. Dollar Rises As Traders Focus On U.S. CPI Data

(RTTNews) - The U.S. dollar strengthened against other major currencies in the Asian session on Thursday, as traders await the U.S. Consumer Price Index (CPI) for August, which is scheduled for release later today.

Consensus estimate show that the headline CPI likely rose 2.9 percent from a year earlier, the fastest pace since January, while the core measure likely held at 3.1 percent.

A tame report could fuel bets of 50 bps rate cut from the Federal Reserve when it meets next week.

With job growth getting stalled due to trade policy uncertainty, markets are also pricing in three additional 25 bps consecutive cuts from the U.S. central bank by January 2026.

Investors optimism increased that the US Fed will lower interest rates a couple of times this year after report showed softer-than-expected US producer price figures.

Following the report, CME Group's FedWatch Tool is currently indicating a 92.1 chance of a quarter-point rate cut and a slim 7.9 percent chance of a half-point rate cut.

The European Central Bank announces its interest-rate decision later today, followed later by a press conference with President Christine Lagarde. With inflation under control and U.S. tariff tensions easing, the likelihood of further rate cuts appears low.

In the Asian trading today, the U.S. dollar rose to 3-day highs of 1.3512 against the pound, 0.8000 against the Swiss franc and 147.79 against the yen, from yesterday's closing quotes of 1.3533, 0.7988 and 147.35, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.33 against the pound, 0.81 against the franc and 149.00 against the yen.

The greenback advanced to 1.1684 against the euro, from Wednesday's closing value of 1.1703. The next possible upside target for the greenback is seen around the 1.15 region.

Against the Australia and the New Zealand dollars, the greenback edged up to 0.6602 and 0.5930 from yesterday's closing quotes of 0.6620 and 0.5942, respectively. On the upside, 0.64 against the aussie and 0.57 against the kiwi are seen as the next resistance levels for the greenback.

The greenback climbed to nearly a 3-week high of 1.3880 against the Canadian dollar, from Wednesday's closing value of 1.3861. The greenback is likely to find resistance around the 1.39 region.

Looking ahead, the European Central Bank will announce its interest rate decision at 8:15 am ET in the New York session. Markets expect the ECB to retain the deposit rate at 2.00 percent. The refinancing rate is seen unchanged at 2.15 percent and the marginal lending rate at 2.40 percent.

Following the monetary policy announcement, the customary press conference by the ECB Chief Christine Lagarde is due at 8:45 am ET.

U.S. CPI data for August and weekly jobless claims data are also slated for release in the New York session.