Dollar Dips Ahead of Inflation Data and Presidential Debate

The dollar slightly declined on Tuesday before critical U.S. inflation data and a televised presidential debate that could influence interest rate expectations. Upcoming events, such as Fed policy meetings and U.S. consumer price index reports, are crucial indicators. The market's focus also rests on Europe's political dynamics and economic strategies.

The dollar slightly declined on Tuesday ahead of critical U.S. inflation data and the upcoming televised presidential debate, which could significantly influence interest rate expectations. Traders are closely watching for Wednesday's U.S. consumer price index report.

Strategists at Barclays observed that the greenback generally weakens ahead of Federal Reserve easing cycles, often overestimating rate cuts during soft economic landings. They believe much of the market move has likely already occurred.

Investor attention will also be on the televised U.S. presidential debate later in the day, which could greatly impact November's election. According to Chris Turner, head of forex strategy at ING, a clear winner in the debate could prompt the forex market to 'front-load' positions expected after the election result.

(With inputs from agencies.)