The dollar index held around 98.8 on Thursday, pausing its recent decline as investors awaited U.S. inflation data that could influence the Federal Reserve’s next policy decision. The producer price index for August is due Thursday, followed by the consumer inflation report on Friday, while weekly jobless claims and existing home sales are also scheduled. Markets are pricing in roughly a 60% probability of a 25-basis-point Fed rate hike next week after stronger-than-expected jobs data. Treasury yields surged after the Treasury Department announced plans to buy back up to $6 billion of longer-term debt, three times the usual amount, although some investors had expected a larger increase. Higher oil prices linked to an intensifying U.S.-Iran conflict have added to inflation concerns and strengthened expectations for near-term rate hikes. The dollar’s pause follows broad weakness earlier in the week, despite supportive factors including higher energy prices. ING’s Chris Turner said the greenback’s failure to benefit from those fundamentals remained a key market focus, citing a fragile USD/JPY and global macro hedge-fund positioning for a break below 150. ING sees no strong case for the DXY to immediately break support at 98.55/65, though a breach could take it toward 98.00 through USD/JPY weakness. Sterling had slipped 0.05% to 1.3534 and EUR/USD was flat at 1.1625 on Wednesday, while ING maintained a year-end-September EUR/USD target of 1.15, contingent on the anticipated Fed move.