Dollar lower after data but set for ninth straight weekly gain

economictimes.indiatimes.com:

The University of Michigan's preliminary reading of its Consumer Sentiment Index dropped to 67.7 this month from a final reading of 69.5 in August and below the forecast of 69.1 among economists polled by Reuters. However, consumers saw inflation lower on both a one-year and five-year basis.
Earlier data from the Labor Department showed import prices increased 0.5% last month as fuel prices jumped, but underlying price pressures stayed subdued while a separate report from the New York Fed showed factory activity picked up in the state in September.
«None of the data currently points to a recession.

Nevertheless, the fed futures still points to the end of next year, a lower rate,» said Joseph Trevisani, senior analyst at FXStreet.com.
«If the credit markets are still convinced that when you increase rates as much as the Fed has, you eventually get a recession… where do people go? They go to the dollar.»
The Federal Reserve will hold a policy meeting next week on Sept. 19-20 and the central bank is largely viewed as keeping interest rates unchanged, with a 97% expectation for no action, according to CME's FedWatch Tool.

After edging higher earlier in the week, expectations for a 25 basis-point cut at the November meeting have declined to 30.6% from 43.6% a week ago.
Markets were adjusting to a new outlook for central bank rate hikes after the European Central Bank on Thursday raised rates to a record high of 4% but signaled the hike was likely to be its last. Euro zone bond yields and the euro fell as investors bet the central bank would start cutting rates next year.

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