# Dollar stands firm while traders await CPI
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-01-11
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Dollar Holds Steady Amid Inflation Data Wait
Meta Description: Follow Reuters for the latest updates on U.S. inflation data, dollar movements, and global economic outlook. Don't miss out on key insights and analysis.
URL: https://financedigest.com/dollar-stands-firm-while-traders-await-cpihtml

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By Tom Westbrook

SINGAPORE (Reuters) – The dollar mostly held its ground on Wednesday in spite of downward pressure from lower bond yields and higher stocks, as traders waited on this week’s U.S. consumer price [data to see whether it will confirm that inflation](https://www.financedigest.com/dollar-trims-gains-vs-euro-after-u-s-inflation-data.html "Dollar trims gains vs euro after U.S. inflation data") is in retreat.

The Australian [dollar wobbled its way about 0.4%higher to $0.6918 after data](https://www.financedigest.com/dollar-skids-after-soft-u-s-economic-data-impact-of-opec-cuts-fades.html "Dollar skids after soft U.S. economic data; impact of OPEC+ cuts fades") showed the annual pace of inflation increased to 7.3% in November, leaving room for more rate hikes. The New Zealand dollar also crept up 0.1% to $0.6378. \[AUD/\]

The U.S. [dollar was steady](https://www.financedigest.com/shares-steady-dollar-gains-ahead-of-u-s-inflation-data.html "Shares steady, dollar gains ahead of U.S. inflation data") elsewhere, loitering at $1.0743 per euro, just above a five-month low, in the lead-up to U.S. [inflation data](https://www.financedigest.com/stocks-mixed-dollar-gains-after-robust-inflation-jobs-data.html "Stocks mixed, dollar gains after robust inflation, jobs data") due on Thursday.

The greenback has lost about 11% against the common currency since hitting a 20-year peak in September, as investors have started to anticipate easing [inflation and with it a falling dollar](https://www.financedigest.com/stocks-and-gold-cheer-u-s-inflation-picture-while-dollar-slides.html "Stocks and gold cheer U.S. inflation picture, while dollar slides") as the need for more interest rate hikes wanes.

But for the past month or so the euro has struggled to make further headway, and [traders have been cautious in selling dollars](https://www.financedigest.com/dollar-hits-one-month-high-against-yen-as-traders-bet-on-fed-rate-hike.html "Dollar hits one-month high against yen as traders bet on Fed rate hike") while the U.S. Federal Reserve continues to promise [hikes and the global economic outlook](https://www.financedigest.com/stocks-euro-gain-amid-divergent-fed-ecb-rate-hike-outlooks.html "Stocks, euro gain amid divergent Fed, ECB rate hike outlooks") is bleak.

It’s becoming harder to argue a [stronger dollar](https://www.financedigest.com/oil-slumps-on-economic-data-stronger-u-s-dollar.html "Oil slumps on economic data, stronger U.S. dollar") story, very clearly,” ING chief economist Rob Carnell said.

But it still remains a difficult one to argue a really strong euro story,” he said, which is holding [back wider losses for the dollar](https://www.financedigest.com/dollar-advances-as-strong-u-s-data-backs-higher-rates-backdrop.html "Dollar advances as strong U.S. data backs higher rates backdrop") as the euro/dollar pair sets the broad tone.

The [dollar was steady at 132.30 Japanese yen](https://www.financedigest.com/yen-sinks-as-rates-outlook-diverges-nz-dollar-tumbles.html "Yen sinks as rates outlook diverges; NZ dollar tumbles") and $1.2161 per British pound. U.S. government bond yields, which have been [attracting investors](https://www.financedigest.com/5-ways-that-start-ups-can-attract-investors.html "5 Ways That Start-Ups Can Attract Investors") to the dollar, fell overnight and upbeat sentiment in equities lifted stock markets.

[Fed Chair Jerome Powell did not give any policy clues](https://www.financedigest.com/oil-steadies-after-dipping-on-china-outlook-investors-await-fed-clues.html "Oil steadies after dipping on China outlook; investors await Fed clues") during a panel discussion in Stockholm overnight, and with other Fed officials saying their next moves will be data-dependent, investors are keenly focused on U.S. CPI data.

Another downward surprise to the [core CPI would cement the deceleration trend,” Commonwealth Bank](https://www.financedigest.com/de-surinaamsche-bank-expands-relationship-with-fiserv-to-upgrade-core-banking-platform-and-add-new-digital-banking-capabilities.html "De Surinaamsche Bank Expands Relationship with Fiserv to Upgrade Core Banking Platform and Add New Digital Banking Capabilities") of Australia strategist Joe Capurso said.

“The U.S. [dollar would ease](https://www.financedigest.com/wall-street-stocks-power-higher-as-treasury-yields-and-dollar-ease.html "Wall Street stocks power higher as Treasury yields and dollar ease") further because another soft core CPI would encourage markets to continue to shift pricing for the (Fed’s) February meeting from a 50 basis point increase to a 25bp increase.

Futures pricing has been bumpy, but indicates markets’ now lean [toward a 3/4 chance of a 25 bp hike](https://www.financedigest.com/boe-raises-rates-again-as-investors-look-towards-end-of-hikes.html "BoE raises rates again as investors look towards end of hikes") next month.

China’s re-opening has also supported [sentiment and lifted](https://www.financedigest.com/sterling-rises-as-receding-bank-sector-worries-lift-sentiment.html "Sterling rises as receding bank sector worries lift sentiment") Asia’s currencies against the dollar.

[China’s yuan](https://www.financedigest.com/dollar-slips-yuan-gains-on-china-pmi-hot-inflation-lifts-euro.html "Dollar slips, yuan gains on China PMI; hot inflation lifts euro") was a whisker short of a five-month high at 6.7677 on Wednesday.

The Singapore dollar has scaled 19-month highs this week and the Thai baht nine-month tops in anticipation of tourism picking up as [China’s borders open](https://www.financedigest.com/asia-shares-bank-on-eventual-china-opening-oil-gains.html "Asia shares bank on eventual China opening; oil gains").

(Reporting by Tom Westbrook, Editing by Himani Sarkar and Kim Coghill)


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