The dollar was in limbo on Tuesday as investors waited to see how U.S. economic data would affect the likelihood of large rate cuts, while a rise in Japanese stocks helped stop the bleeding in yen carry trades.
The dollar was trading at 147.17 yen, after briefly reaching a one-week high of 148.23 overnight before profit-taking set in.
The euro stayed at $1.0931 after rising overnight and approaching resistance at $1.0944 and $1.0963. The dollar index remained unchanged at 103.08.
Producer price numbers anticipated tomorrow will serve as an appetiser for the major inflation report on Wednesday, and they could upset markets because they feed through to the core personal consumption (PCE) metric preferred by the Federal Reserve.
The headline and core PPI are expected to grow by 0.2% each.
More importantly, the consumer price data and retail sales for July will have a significant impact on whether the Fed eases by 25 or 50 basis points in September.
Futures are currently evenly split on the greater move, after briefly pricing it as a dead certainty last week when stock markets were in freefall.
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