Dollar edges lower as traders await U.S. inflation report

U.S. Dollar banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration

NEW YORK, Aug 9 (Reuters) – The dollar edged lower on Tuesday in thin summer trading with market participants in wait-and-see mode ahead of key inflation figures that could shed more light on how aggressive the Federal Reserve might be in its expected interest rate hike in September.

Traders are widely expecting Wednesday’s U.S. Consumer Price Index report to show that decades-high inflationary pressures eased in July following back-to-back 75-basis point hikes by the Fed in June and July aimed at combating soaring prices.

But data on Friday showed that U.S. employers hired far more workers than expected last month, with wages still rising at a strong clip, temporarily sending the dollar higher as bets rose for another mammoth rate hike by the Fed at its Sept. 20-21…