Dollar Holds Steady Ahead of Key Inflation Report

U.S. Dollar Holds Steady, but the Future Still Looks Hazel

When the market clock ticked into a new week, the dollar strutted out of the opening session feeling pretty solid—no big drama on the horizon. Yet the big players are keeping a close eye on a few key inflation numbers that are set to drop tomorrow, and that could wobble the currency a bit.

Why Traders Are Watching Inflation Like a Cat Watching a Laser Pointer

Soft economic data – jobless claims popped up higher and the July Non‑Farm Payrolls (NFP) came in under expectations. These hiccups suggest a weaker labor market, nudging spotters toward theories that the Federal Reserve will slice rates this September.
Fed officials back the narrative – Fed Governor Bowman hinted that three cuts a year could be the sweet spot, saying the labor market’s weakening light overshadows inflation worries.
Yields behave like a nervous cat – Treasury yields have stayed near recent lows but even a brief bounce signals the market is inching toward a dovish policy stance.

What a Tomorrow‑Morning Inflation Read Might Spell

There are a couple of scenarios on the table:

SAFER CPI – If the Consumer Price Index slides lower, it could boost the idea that the Fed will trim rates again, dragging the dollar down even further.
UNPLUMBED CPI – On the flip side, a surprise uptick could shake things up, re‑igniting support for higher yields and possibly giving the dollar a brief lift.

All Eyes on the Next Fed Speech

After inflation numbers land, the Fed’s upcoming address at the Jackson Hole forum will be the next big news item. The big thinker’s tone could confirm or unsettle expectations—either way, the swing of the dollar will depend on how the market digests that message.