FX.co ★ Dollar Ticks Higher Ahead of Key Inflation Data

The dollar index inched toward 99.9 on Wednesday, logging modest gains as investors positioned ahead of key inflation data that could shape the Federal Reserve’s next policy decision. The consumer price index is due later today, followed by producer price data on Thursday. Markets remain split on whether the Fed will deliver a 25-basis-point rate hike in September after holding rates steady in July, with rising oil prices bolstering expectations for a more hawkish stance. On Tuesday, Chicago Fed President Austan Goolsbee emphasized that the central bank is more worried about inflation staying too high than about potential softness in the labor market. On the geopolitical front, investors weighed the chances of a US-Iran agreement to reopen the Strait of Hormuz, after Pakistan’s defense minister said Washington and Tehran are “close to some sort of arrangement.”