Dollar Holds Steady Ahead of CPI as RBA Keeps Rates Unchanged

The U.S. dollar held broadly steady on Tuesday as traders awaited U.S. CPI for fresh clues on the Federal Reserve’s rate path. The Dollar Index was near 99.84 after July payrolls unexpectedly fell by 23,000, prompting markets to reduce expectations for near-term Fed tightening.

Meanwhile, the Reserve Bank of Australia kept its cash rate unchanged at 4.35%, as expected, after underlying inflation came in below forecasts. The Australian dollar remained largely flat, with markets weighing persistent inflation against weaker economic activity.

Trader outlook: U.S. CPI is the immediate catalyst for USD and rate markets. Softer inflation could reinforce expectations for easier Fed policy and pressure the dollar, while stronger data could lift yields and USD. For AUD, traders may focus on RBA guidance and the evolving policy-rate differential with the Fed.