NEW YORK/MILAN, Sept 10 (Reuters) – The dollar slid against major currencies on Tuesday, consolidating Monday’s gains ahead of key inflation data and a widely anticipated U.S. presidential debate, even though both their outcomes are unlikely to affect overall monetary policy.
The Federal Reserve is expected to cut interest rates next week for the first time in more than four years. What is still up for debate is the size of the rate cut, with the fed funds futures market pricing in a 73% chance of a 25 basis point cut at the Sept. 17-18 policy meeting and a 27% probability the Fed might do 50 bps, according to LSEG calculations..
“Markets are in a bit of a holding pattern ahead of CPI (consumer price index) tomorrow, but there’s a bit of crackle in the air today from election jitters and Chinese economic sentiment,” said Helen Given, FX trader at Monex USA in Washington, referring to data from China released earlier on Tuesday.
China’s imports missed forecasts and grew just 0.5%. That followed Monday’s lower-than-expected inflation data, highlighting still weak domestic demand.
“Expectations for CPI tomorrow are a bit…
