Sept 15 (Reuters) – The dollar index slipped a touch on Thursday, heading toward the US close down 0.08% after retail sales and jobless claims raised few doubts that the Fed continue delivering rate hikes aimed at tempering growth.
Focus is squarely on next week’s Fed meeting, with futures indicating a 75bp hike fully priced in with chances of a 100bp move a touch lower at 20%, down from near 30% after Tuesday’s CPI data.
EUR/USD remains anchored by 1.00, with gains likely to moderated by expectations that the Fed will hike faster and higher than the increasingly aggressive ECB.
USD/JPY gained slightly as fears of BoJ intervention near recent highs ebbed.
Weak longs have been happy to take profits on the recent runup and reversal, but verbal intervention alone may only slow USD/JPY’s advance on 145 en route to the big prize of 150, encouraged by Fed-BoJ rates divergence.
Sterling was the weakest link among the majors, GBP/USD down 0.45% at 1.1490. Diverging US-UK rates, increased UK government spending and near-double digit inflation remain hindrances for cable before next week’s BoE meeting.
The S&P 500 was down 0.2% and the tech heavy Nasdaq 0.8% lower, as Treasury yields rose and the inverted US 2s-10s spread, a closely watched metric for the health of the US economy, at -40bp.
Higher Treasury yields weighed on precious metals, gold down 1.6% to USD 1,668 and silver down 2.2% at USD 19.26.
Cryptocurrencies fell with risk, BTC -2% at USD 19.8k, ETH -7% at USD 1,510.
(Editing by Burton Frierson; Paul Spirgel and Christopher Romano are Reuters market analysts. The views expressed are their own.)