The US dollar declined against most of its main trade partners early Wednesday, with the exception of the British pound, as markets focused on August consumer price index (CPI) data.
As one of the final major data points before the Federal Open Market Committee meeting on September 17-18, CPI will assist determine the extent of the rate drop that is expected.
Both the overall and core CPI are forecast to grow by 0.2% in August, matching the improvements seen in July. The total CPI rate is predicted to fall to 2.5% year on year from 2.9% in July, while the core rate is expected to remain at 3.2%.
Earlier, the Mortgage Bankers Association said that mortgage applications rose further in the week ended Sept. 6. Fixed rates for conventional 30-year mortgages fell for a sixth consecutive week to an average of 6.29%, their lowest level since February 2023.
A short overview of foreign exchange action heading into Wednesday revealed that USDEUR climbed to 1.1047 from 1.1026 at Tuesday’s US close and 1.1038 at the same time Tuesday morning.
Wednesday’s agenda has no Eurozone data. The European Central Bank’s rate decision is due for Thursday, with a 25-basis-point drop forecast.
GBPUSD declined to 1.3079 from 1.3086 at Tuesday’s US close and 1.3099 at the same time Tuesday morning. UK GDP remained steady in July and increased less than predicted year on year, according to figures released tonight.
The next Bank of England meeting is planned on September 19. USDJPY declined to 141.6002 from 142.3142 at Tuesday’s US closing and 143.0169 at the same time Tuesday morning.
The Reuters Tankan index, a measure of Japanese business conditions, declined in September in data released overnight. The next Bank of Japan meeting is scheduled for Sept. 19-20.
USDCAD fell to 1.3579 from 1.3601 at the Tuesday US close but was above a reading of 1.3567 at the same time Tuesday morning. Canadian consumer sentiment data for September is due to be released. The next Bank of Canada meeting is scheduled for Oct. 23.
