NEW YORK: The dollar eased broadly on Thursday after US data suggested upward price pressures continue to ease, keeping Federal Reserve policymakers on track to cut short-term US borrowing costs by a quarter percentage point next week.

Data on Thursday showed US consumer spending increased slightly more than expected in September, putting the economy on a higher growth trajectory heading into the final three months of the year.

Inflation by the Fed’s targeted measure, the year-over-year increase in the personal consumption expenditures index, was 2.1% in September, down from an upwardly revised 2.3% in August, a Commerce Department report showed. The Fed aims at 2% inflation.

“(The) US economic releases confirm that the economy remains on course for a ‘soft landing’, with the economy continuing to make disinflationary progress back towards the FOMC’s 2% price target,” Michael Brown, senior research strategist at Pepperstone, said.

The Fed is likely to go ahead with cutting short-term US borrowing costs by a quarter percentage point next week, traders bet on Thursday, with futures contracts settling to the Fed’s policy rate putting the chances of a 25 basis point cut next week at about 94%.

The dollar also came under pressure against the yen after the Bank of Japan took a less dovish tone than expected, while the euro was stronger after data showed the bloc’s inflation accelerated more than expected in October, bolstering the case for caution in European Central Bank interest rate cuts.

The dollar was down 0.48% against the yen at 152.68 yen and the euro was 0.3% higher against the buck at $1.088725.

“Some of the move is likely a function of yen demand after a marginally more hawkish BoJ during the Asia session, as well as some upside in the euro after hotter-than-expected CPI figures dented the chances of a 50 basis points December ECB cut,” Pepperstone’s Brown said.

Traders were also likely taking the opportunity to book profits after the dollar’s strong run in recent weeks, Brown said.

The Dollar Index, which measures the US currency’s strength against a basket of major peers, rose as much as 4.5% from its September lows.

Attention now turns to Friday’s closely watched nonfarm payrolls report and next week’s US presidential election on Tuesday.

Economists polled by Reuters estimate 113,000 jobs were added in October, although the number could be lower due to recent hurricanes.

“A slightly hotter or slightly cooler (jobs) number to me probably doesn’t change the dial too much given the upbeat trend in recent economic data,” said IG Market Analyst Tony Sycamore.

“It makes sense to me to be ... taking some risk off and moving to the sidelines” ahead of a week that will “set the tone for the end of the year,” he said. Some investors have been putting on trades betting Republican candidate Donald Trump will win, helping to lift the dollar and US Treasury yields, although he is still neck and neck with Democratic Vice President Kamala Harris in several polls.