The Dollar steadied in Asian trading on Thursday following an unexpected decline in US factory-gate prices, which strengthened expectations that the Federal Reserve may cut interest rates next week.

Investors are now awaiting US consumer price data later in the day.

The Dollar index edged up 0.1% to 97.83, marking its third consecutive day of gains after the Labour Department’s Bureau of Labour Statistics reported that the Producer Price Index for final demand fell 0.1% in August. This decline came after July’s 0.7% increase, which was also revised downward.

Markets are operating on the assumption that the Federal Reserve will ease rates, with the main question being the extent of the cut, Reuters reports.

According to the CME Group’s FedWatch tool, traders see an 8.9% probability of a larger 50 basis point cut at the Fed’s 16-17 September meeting, while a reduction of at least 25 basis points is widely considered certain.

Attention remained on appointments to the Fed’s rate-setting panel after the Trump administration on Wednesday filed an appeal against a federal judge’s temporary order blocking President Trump from dismissing Federal Reserve Governor Lisa Cook ahead of next week’s central bank meeting.

Meanwhile, Stephen Miran moved closer to joining the Fed as a governor, part of Trump’s push to gain more direct influence over interest rate decisions.

The Senate Banking Committee approved advancing his nomination, although lawmakers noted it remains uncertain whether the process can be completed in time for him to take part in the upcoming meeting.

In addition, the Euro inched up 0.04% to $1.1699 ahead of the European Central Bank’s policy meeting later on Thursday, where rates are widely expected to remain unchanged. Analysts suggested that policymakers might adopt a more dovish stance to address ongoing trade and political challenges across the region.

The single currency is stabilising after two days of losses, amid rising geopolitical tensions on the bloc’s eastern border.

Furthermore, the Dollar held steady at 147.43 Yen, following data showing that Japanese wholesale prices climbed 2.7% year-on-year in August, up from the previous month, indicating persistent inflationary pressures in the world’s fourth-largest economy.

Elsewhere, the Australian Dollar fell 0.1% to $0.66095, retreating from Wednesday’s highs, the highest since November, as commodities such as crude oil and gold lost recent gains.

The offshore Yuan rose 0.03% to 7.1184 per Dollar in early Asian trading, while the New Zealand Dollar slipped 0.1% to $0.5936. Sterling remained steady at $1.3525.