TOKYO- The US 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 US 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 US 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 US dollar index – measuring the currency against a basket of six developed-market peers, including the euro and yen – edged 0.1 percent lower to 104.63 in the Asian morning.
The euro added 0.1 percent to $1.07415, continuing its grind higher from last week’s low of $1.0686.
The dollar slipped 0.2 percent 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 percent 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 percent .
The US consumer price index (CPI) increased by 0.6 percent 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 percent year-on-year rate in August from 4.7 percent 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 percent.
