Dollar hovers below 3-month high to euro as ECB decision looms
By Kevin Buckland
TOKYO (Reuters) — The U.S. dollar hovered below a three-month high to the euro on Thursday as attention turned to the European Central Bank's rate-setting meeting later in the day, after U.S. inflation data failed to alter views for a Federal Reserve pause next week.
The yen pulled away from near a 10-month trough to the dollar as a decline in long-term Treasury yields removed some support for the U.S. currency.
Australia's dollar popped to a one-week high after strong employment figures, but then quickly retraced most of the advance as the data showed the vast majority of new jobs were part-time.
The U.S. dollar index — measuring the currency against a basket of six developed-market peers, including the euro and yen — edged 0.1% lower to 104.63 in the Asian morning.
The euro added 0.1% to $1.07415, continuing its grind higher from last week's low of $1.0686.
The dollar slipped 0.2% to 147.125 yen, falling back from near last week's peak of 147.875.
The benchmark 10-year Treasury yield eased a further basis point (bp) to around 4.24% in early Thursday trading, extending a 1.6 bps decline from the previous session, when it also at one point surged to a three-week top at 4.352%.
The U.S. consumer price index (CPI) increased by 0.6% last month, the largest gain since June 2022, the Labor Department said on Wednesday. However, core inflation, which is of greater concern to the Fed as it strips out food and energy prices, ran at a 4.3% year-on-year rate in August from 4.7% the previous month.
Traders remain almost certain the Fed will keep rates steady again on Sept. 20, according to money market pricing. Odds for a quarter point increase by year-end though, stand at about 40%.
Meanwhile, wagers for a hike
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