Dollar Edges Higher

The dollar index edged toward 99.9 on Wednesday, posting modest gains as investors braced for key inflation readings that will likely influence the Federal Reserve’s next policy move.

The consumer price index report is due later today, followed by producer inflation data on Thursday.

Markets remain divided over whether the Fed will raise rates by 25 basis points in September after keeping them unchanged in July, with rising oil prices reinforcing a hawkish bias.

On Tuesday, Chicago Fed President Austan Goolsbee also said the central bank is more concerned about inflation remaining too high than potential weakness in the labor market.

On the geopolitical front, investors assessed the prospects of a US-Iran deal to reopen the Strait of Hormuz after Pakistan’s defense minister said Washington and Tehran are “close to some sort of arrangement.”