By Scott Kanowsky
Investing.com -- The dollar held steady ahead of new data out of the U.S. that is expected to show a slight moderation in red-hot inflation in the world's largest economy.
As of 02:30 AM EST (0630 GMT), the US Dollar Index - which measures the greenback against a basket of other major global currencies - was trading down only marginally by 0.04% at 106.33.
The July U.S. consumer price index, due out at 08:30 AM EST (1230 GMT), is forecast to come in at 8.7%, down from the soaring level of 9.1% hit in the previous month. A decline may be seen as an early sign that inflation has peaked, even though prices would remain near their highest level in four decades.
Such a decrease is unlikely to change the narrative for the Federal Reserve, which has been aggressive in hiking interest rates in a bid to bring down surging inflation. The Fed has said that it will take several months of falls in CPI growth before it pumps the brakes on rate tightening.
The central bank will also have a set of August economic indicators to mull over ahead of its next rate decision, but investors will be looking for potential clues to its initial reaction to Wednesday's data in comments later today from Fed officials Charles Evans and Neel Kashkari.
Elsewhere, China’s consumer and producer prices grew at a slower-than-expected rate in July, showing that the country was still grappling with damaging COVID-19 lockdowns. The USD/CNH lost minimal ground against the dollar following the data in offshore trade.
The AUD/USD was also holding slightly above its 50-day moving average at $0.6960, while the NZD/USD was flat at $0.6284. Japan's yen moved down 0.08% to JPY 135.03.
Meanwhile, German CPI rose 0.9% on the month in July, falling only marginally to 7.5% on the year, showing that price pressures remained strong in Europe’s largest economy.
The EUR/USD was broadly unchanged in the wake of the data, with the common currency changing hands at $1.0208.
Additionally, Bitcoin slid by 3.89% to $22,942.2, as the digital currency continues to feel the impact from recent crypto fund failures and thefts.