The dollar index is steadying near a three-month high on Thursday, registering a small pullback from recent spike that followed higher than expected US inflation data. Data on Tuesday showed that the headline inflation rate fell to 3.1% in January from 3.4% in December, but came in above forecasts of 2.9%. The core inflation rate was unchanged at 3.9%, defying expectations for a slowdown to 3.7%. Reduced expectation of an early rate cut is keeping the greenback elevated. Meanwhile, Chicago Fed President Austan Goolsbee's yesterday indicated that higher-than-expected consumer prices don't necessarily rule out the possibility of the Federal Reserve considering interest rate cuts in 2024. The US Dollar Index (DXY), which measures the value of the USD relative to a basket of global currencies, retraced from a three-month high of nearly the 105.00 mark and hovers around 104.55. The US Treasury yields edge lower, with the 10-year yield standing at 4.26%. Retail Sales data and Initial Jobless Claims will be closely watched on Thursday. Among the basket currencies, EURUSD and GBPUSD are staying muted at $1.0744 and $1.2571 respectively.
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