Nickel prices fell on Thursday despite a weaker US dollar against most major currencies, as bets on Federal Reserve interest rate cuts continued. The Russia-Ukraine war also weighed on metals markets, with Russia being one of the world’s largest producers of industrial metals.

The administration of US President Donald Trump is pressuring Russia by tightening economic sanctions in an effort to reach a ceasefire agreement in Ukraine.

Meanwhile, the dollar index fell 0.3% to 97.5 points by 16:19 GMT, after reaching a high of 98.09 and a low of 97.4.

Economic data came in mixed. The US consumer price index (CPI) for August rose 0.4% month-on-month, above forecasts of 0.3%, according to the Bureau of Labor Statistics. The annual rate was 2.9%, in line with economists’ expectations.

Core CPI, which excludes volatile food and energy prices, rose 0.3% on a monthly basis and 3.1% annually, both matching Dow Jones forecasts.

This report followed Wednesday’s producer price index (PPI) data, which showed an unexpected 0.1% monthly decline, while the annual rate was up 2.6%.

In other data on Thursday, weekly jobless claims posted a surprise jump, rising by 27,000 to 263,000 in the week ending September 6 after seasonal adjustments. That exceeded forecasts of 235,000.

Despite this data, traders still expect the Federal Reserve to cut rates by 25 basis points at its September 17 meeting, according to the CME FedWatch tool, while slightly increasing bets on a larger 50-basis-point cut.

In trading, spot nickel contracts fell 0.4% to $15,003 per ton as of 16:29 GMT.

Bitcoin rose on Thursday morning, breaking above $114,000, supported by weaker-than-expected US inflation data and stronger institutional inflows into spot exchange-traded funds (Spot ETFs).

The cryptocurrency jumped after the US Producer Price Index (PPI) showed wholesale inflation slowing in August, with prices down 0.1% month-on-month and easing to 2.6% year-on-year. This unexpected drop in PPI opened the door for risk assets, pushing Bitcoin firmly through the $113,000 level.

According to CoinGecko data, Bitcoin was trading at $114,100 at the time of writing, up more than 2% on Thursday.

The broader cryptocurrency market also advanced, with total market capitalization rising 1.5% to $4.06 trillion.

Ethereum (ETH-USD) followed Bitcoin higher, trading above $4,440 in early dealings, supported by investor appetite for ETFs and on-chain accumulation.

Timothy Messer, Head of Research at BRN, said: “The downside PPI surprise was a clear catalyst, sending Bitcoin to $114,000 and accelerating institutional inflows. The market is now at a crossroads: if CPI comes in weaker than expected, momentum is likely to continue with volatility compressing. But if CPI surprises to the upside, rapid risk-off moves will follow.”

Institutional flows into spot Bitcoin ETFs highlighted this sentiment shift. Bitcoin funds attracted $757 million in net inflows on September 10, marking a third consecutive day of gains, according to BRN data.

Ethereum funds also saw $172 million in inflows, while blockchain infrastructure firm Bitmine added 46,255 ETH (worth about $201 million) to its holdings, bringing its total to more than 2.1 million ETH ($9.24 billion).

In derivatives markets, traders showed greater risk appetite. Open interest in Bitcoin futures climbed to $84.86 billion, while forced liquidations fell to $37.96 million, mostly from short sellers. Total futures trading volume rose to about $53 billion, reflecting strong participation from both traditional investors and leveraged traders.

Focus on US CPI Data

Traders are now eyeing the US consumer price index (CPI) release on Thursday to test momentum. A second weak inflation print could reinforce bets on three Fed rate cuts between now and year-end. A stronger-than-expected reading, however, could flip Bitcoin ETF flows negative and renew pressure on risk assets.

Fed Decision Looms

Further deterioration in July and August labor market data has left the Fed under pressure to cut rates, while core inflation remains above 3%, conflicting with the central bank’s dual mandate.

As a result, investors expect the Fed to stimulate the economy with a larger-than-expected rate cut. While markets have already priced in a quarter-point cut, speculators are betting on a half-point move, which may explain the strong ETF inflows into Bitcoin, according to Stephen Gregory, founder of trading platform Vtrader.

The CME FedWatch tool shows a 92% probability of a 25-basis-point cut, versus just 8% for a 50-basis-point move. On Myriad, the prediction platform run by DASTAN (parent company of Decrypt), users put the probability of a 25-basis-point cut at 80%.

Oil prices fell on Thursday as concerns over slowing demand in the United States and the risk of global oversupply offset anxiety about attacks in the Middle East and the ongoing Russia-Ukraine war.

Brent crude futures fell 21 cents, or 0.3%, to $67.28 a barrel by 09:11 GMT, while US West Texas Intermediate crude declined 26 cents, or 0.4%, to $63.41 a barrel.

Benchmark contracts had risen by more than $1 each on Wednesday after Israel’s attack on Hamas leadership in Qatar the previous day, along with Poland and NATO deploying air defenses to shoot down suspected Russian drones that entered Polish airspace during an assault on western Ukraine.

However, the International Energy Agency said in its monthly report that global oil supply will rise faster than expected this year, with output increasing from OPEC+ countries as well as non-member producers, while demand growth remains limited.

Tamas Varga, analyst at PVM Oil Associates, said: “Our market is torn between a perceived supply shortage due to escalating tensions in the Middle East and Ukraine, and an actual surplus reflected by OPEC+ production increases and rising inventories in the US weekly and monthly energy reports.”

He added that uncertainty over secondary sanctions on Russian oil buyers, such as China and India, is providing a price floor, but he expects prices to resume their decline once geopolitical tensions ease.

US Energy Information Administration data showed crude inventories rose by 3.9 million barrels in the week ending September 5, compared with expectations for a 1 million-barrel decline.

Meanwhile, weakness in the US economy has fueled expectations that the Federal Reserve may cut interest rates next week. Tony Sycamore, analyst at IG Markets, said: “Traders are taking a more cautious stance ahead of today’s US CPI report, as deeper Fed rate cuts are already priced in, and a stronger-than-expected CPI could upset those assumptions.”

OPEC+, which includes the Organization of the Petroleum Exporting Countries and its allies, decided on Sunday to increase production starting in October. OPEC is scheduled to release its monthly oil market report later on Thursday.

The US dollar held steady on Thursday as investors awaited US consumer inflation data for clearer signals on the Federal Reserve’s rate-cut path, while the euro remained unchanged ahead of the European Central Bank meeting.

Michalis Rousakis, G10 FX strategist at Bank of America, said: “The main event is the US CPI data… the market is looking for justification to reprice Fed expectations toward a larger cut, which could push the dollar lower.”

He added that the question is whether the Fed can be repriced for more easing, “given that markets are already pricing in a cut in September, and nearly three cuts by year-end.” He explained that Bank of America’s baseline expectation is for two additional cuts this year.

The dollar index rose 0.1% to 97.91, with the US currency largely stable against major counterparts.

This came after data on Wednesday showed an unexpected decline in US producer prices, strengthening expectations of a Fed rate cut next week. It followed Tuesday’s revision to payroll figures, which revealed the US created 911,000 fewer jobs in the 12 months through March than previously estimated.

In Europe, the ECB is expected to keep rates unchanged at its meeting later today. The euro was steady at $1.169225 before the decision. Analysts said policymakers may adopt a more dovish tone to address trade and political uncertainty across the continent.

The single currency stabilized after two days of losses, while geopolitical tensions on the EU’s eastern flank continued. Poland said Wednesday it shot down suspected Russian drones in its airspace with NATO support — the first known instance of a NATO member using direct military force since the Russia-Ukraine war began.

In a note, Commerzbank analysts said hopes that the ECB meeting might spark a bigger EUR/USD move could be disappointed, given the lack of expected new information. They added: “If there are any hopes, they may rest with ECB President Christine Lagarde, who appeared surprisingly hawkish in her last two press conferences.”

But they emphasized that with no rate cut expected until June next year, Lagarde is unlikely to reveal her stance at this early stage.

Focus on the Fed

Market attention remains centered on the Fed’s easing path. Investors view rate cuts as a given, but the question remains: how large?

According to the CME FedWatch tool, traders price an 8.9% chance of a larger 50-basis-point cut at the September 16–17 meeting, while a 25-basis-point cut is fully guaranteed.

At the same time, the Fed’s policymaking committee has remained in focus, after the Trump administration on Wednesday moved to appeal a court ruling that temporarily blocked his unprecedented attempt to dismiss Fed Governor Lisa Cook. The White House seeks to remove her ahead of next week’s meeting.

Meanwhile, Stephen Miran moved a step closer to joining the Fed Board of Governors, part of Trump’s efforts to expand his direct influence over monetary policy. The Senate Banking Committee voted to advance his nomination, although lawmakers noted it remains uncertain whether the process will be completed in time for him to participate in the upcoming meeting.

Other Currencies

The dollar rose 0.2% to ¥147.80 after data showed Japan’s wholesale prices increased 2.7% year-on-year in August, accelerating from the previous month and reflecting continued inflationary pressures in the world’s fourth-largest economy.

The Australian dollar fell 0.1% to $0.66095, retreating after hitting its highest since November on Wednesday as commodity prices, including oil and gold, weakened.

The offshore yuan traded at 7.1216 per dollar, up 0.04%. The New Zealand dollar dropped 0.2% to $0.59290, while sterling slipped 0.1% to $1.35195.