The dollar posted a modest gain Wednesday as odds of a jumbo 50bp Fed rate cut next week fell after U.S. consumer inflation for August largely met expectations.

U.S.
CPI rose 0.2% on the month with the annual rate of inflation advancing 2.5%, its slowest pace since February 2021.
The core measure that excludes food and energy was up 0.3% on the month, slightly above estimates.

Odds of a 50bp Fed cut slid below 20% following the report and Treasury yields advanced across tenors.

The euro largely orbited 1.10 where a series of large options get set to roll off Thursday following an ECB rate decision.

The pound was on its heels Wednesday after UK GDP and output data came in below forecast.

Treasury yields were higher across nearly all tenors with the 2-year advancing 5 basis points.
The 2s-10s curve flattened to a more inverted -3.99bp.

The S&P 500 rose 0.27%, reversing an earlier loss after the US data.

WTI jumped 2.68%, driven by fears of lengthy production shutdowns in the offshore oil patch, which Hurricane Francine was barreling through on Wednesday.

Copper advanced 1.46%.

Gold eased 0.03%, hurt by rising Treasury yields.

Heading toward the close: EUR/USD -0.01%, USD/JPY -0.16%, GBP/USD -0.26%, AUD/USD +0.20%, DXY +0.02%, EUR/JPY -0.11%, GBP/JPY -0.89%, AUD/JPY -0.08%.

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