Dollar Stagnation Amid Fed Speculations and Tariff Impacts

The dollar maintained its position within a narrow trading range on Wednesday as investors held back amid uncertainty surrounding the Federal Reserve's future leadership and recent disappointing U.S. economic data. President Donald Trump is expected to fill an upcoming vacancy on the Fed, further influencing market outlooks and decisions.

U.S. services sector activity showed unexpected stagnation in July, with input costs surging. This development highlights the negative impact of Trump's tariffs on the economy, extending to corporate earnings and spurring cautious trading ahead of the anticipated Federal Reserve changes. Concerns are rising over potential partisan influence within the Fed's policy decisions.

In currency trading, the dollar edged 0.1% higher against the yen; other currency movements were noted with possible impacts from future policy directions. While some currencies rose against the dollar, traders priced in an 86.5% likelihood of a Fed rate cut in September, amid debates over U.S. economic health and inflationary pressures.

(With inputs from agencies.)