USD stabilized on Wednesday in a limited range of trading against a basket of global currencies as investors refrained from building new positions in anticipation of major US inflation data, which provides important evidence of the possibility of a hike in US interest rates this year.
USD index is trading around 96.50 points, with the opening level at 96.47 points, the highest at 96.63 and the lowest at 96.42.
Yesterday, the index lost 0.35%, its first loss in nine days, ending the longest daily gain since November 2016 on correction and profit taking after recording a two-month high of 96.98 points earlier in the session.
The gains in USD during this period supported investors’ focus on buying the dollar as the best current investment in the foreign exchange market, especially under the negative pressures facing most other major currencies, notably the Euro and the British Pound.
Investors are looking ahead to key US inflation data in January, the strength of that data will revive hopes that the Federal Reserve will raise US interest rates this year.
The consumer price index will be released by 13:30 GMT, forecasting a 1.5% annual increase in January from a 1.9% rise in December and a 0.1% monthly reading expected from a 0.1% drop in the previous reading.