U.S. Dollar Ticks Higher As Investors Brace For U.S. Inflation Data

(RTTNews) - The U.S. Dollar value ended nearly flat as market participants anticipate the upcoming Producer Price Index and Consumer Price Index reports to analyze the monetary policy outlook of the U.S. Federal Reserve ahead of its next week's meeting. Traders are pricing in an interest rate hike by the Fed following the recent U.S. jobs data.

Today, the U.S. Dollar Index DXY, which measures the Greenback against a basket of other major currencies, was last seen trading at 98.79, up by 0.01 (or 0.01%).

While against the Euro, the USD was trading at 1.163, down by 0.08%, against the GBP, the USD was trading at 1.355, down by 0.05%.

Against the USD, the Japanese Yen was trading at 153.552, up by 0.27%. With the U.S. and Japanese officials expressing readiness for coordinated intervention to support the Yen, it advanced against the U.S. dollar.

Against the USD, the Swiss Franc was trading at 0.810, down by 0.10%; and the Canadian Dollar was trading at 1.381, down by 0.16%.

Against one unit of Australian Dollar, the USD was trading at 0.722, down by 0.03%.

In the U.S., following last Friday's nonfarm payrolls report which revealed that the economy added 162,000 jobs in August, exceeding market expectations of 56,000, traders are anticipating a possible monetary policy tightening by the U.S. Federal Reserve.

Today on the economic front, the purchase index released by the Mortgage Bankers Association of America decreased to 157.50 in September from 157.80 of the previous week.

Data released by the Automatic Data Processing revealed an addition of 12,500 jobs per week over the four weeks ending August 22.

With the U.S. Federal Reserve's monetary policy meeting slated to begin in less than a week, attention of investors is now focused on the Consumer Price Index and the Producer Price Index reports to be released this week to gauge the Fed's policy path as well as its outlook on the U.S. economy.

According to the CME Group's FedWatch Tool, currently investors are betting on a 60.20% chance of a 25-basis-point interest rate-hike at the upcoming meeting of the U.S. Federal Reserve on September 15-16 while the odds on rates being held at the current level stand at 39.80%.

Meanwhile, crude oil supply disruption due to the closure of Strait of Hormuz has led to concerns of oil-linked inflation across the world as well as the possibility of a low demand growth.

Experts warn that escalation in costs tend to push people to curtail their consumption and reserve their finances for essential expenditures only.

As of Wednesday, the national average gasoline prices hovered around $4.2245 in the U.S., according to American Automobiles Association's data.

On Saturday, in retaliation to an attack on two U.S. Navy warships by Iran's Islamic Revolutionary Guards Corps, U.S. forces hit three Iranian crude oil tankers and disabled them permanently.

On Sunday, diminishing the expectations of possible U.S.-Iran re-negotiations, in an interview with ABC News, U.S. Energy Secretary Chris Wright stated that the U.S. may not be able to strike a nuclear deal with Iran.

Yesterday, United States Central Command claimed destroying five Iranian crude oil carriers after the Islamic Revolutionary Guards Corps targeted a U.S. Navy warship.

IRGC targeted two U.S. vessels and eight oil tankers and attacked a military base in Jordan that hosted U.S. troops.

IRGC also widened the "restricted zone" outside the Strait of Hormuz, extending from Chabahar into parts of the Gulf of Oman and the Arabian Sea.

While U.S. Secretary of State Marco Rubio warned that every time Iran attempts to hit U.S. Naval warships, it will lose its tankers, Iran counter-warned that U.S. will be responsible for any consequences on U.S. vessels in the region.

Citing Kpler's data, Reuters reported that only six commodity vessels passed through the Strait of Hormuz on Tuesday.

Today, the U.S. Treasury Department announced that it could buy back up to $6 billion of longer-dated debt, above the previously indicated minimum of $4 billion per operation.