Investing.com – The U.S. dollar stabilized near a seven-week high Thursday ahead of a key inflation report, while the euro languished near recent lows.

At 04:15 ET (08:15 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded largely unchanged at 102.684, close to seven-week highs hit earlier this week.

CPI data looms large 

The dollar is trading in a tight range Thursday, but remains at elevated levels in the wake of Friday’s strong report which prompted the market to largely rule out the chance of another 50 basis point cut in November.

The of the Fed’s September meeting showed policymakers in full support of the central bank’s 50 basis point cut then, but they also remained uncommitted over the pace of future easing.

“Reading through the September FOMC minutes, there seemed no sense of urgency from the Fed to get rates lower – even though it did cut by 50 bps,” said analysts at ING, in a note. “More a sense that the inflation scare was over, unemployment was drifting higher and a risk management approach required a recalibration of policy.”

The focus was squarely on the due later in the day, which is likely to factor into the Fed’s plans for interest rates. The data is expected to show headline CPI inflation eased slightly, while core CPI remained sticky. 

Traders were seen pricing in a 79.5% chance for a 25 bps cut in November, and a 20.5% chance for a hold, showed.

German retail sales rise

In Europe, traded largely unchanged at 1.0939, after rose 1.6% in August on a monthly basis, a small improvement from the 1.5% gain seen the prior month.

However, this good news was tempered by the German government downgrading its 2024 growth forecast, with Economy Minister Robert Habeck predicting late Wednesday that gross domestic product in the eurozone’s largest economy would shrink 0.2% this year, down from an earlier forecast of 0.3% growth.

This would mean that Germany is expecting its first two-year recession in almost two decades.

The meets next week, and is expected to ease policy once more having already cut rates twice this year.

rose 0.1% to 1.3081, ahead of the release of the Bank of England’s latest credit conditions survey as traders look for clues as to the likely path of rate cuts by the central bank going forward.

Japanese yen struggles

fell 0.1% to 149.13, after hitting an over two-month high. 

The Japanese currency took little support from stronger-than-expected producer prices, as markets bet that the Bank of Japan will face difficulty in raising interest rates further.

fell 0.1% to 7.0771, with the yuan reversing some recent weakness as traders looked to more stimulus measures from Beijing to support growth.

China’s finance ministry said it will hold a briefing on Saturday to outline plans for fiscal stimulus, after a raft of recent monetary stimulus measures largely disappointed markets.