Dollar Steadies as Inflation Data Eyed

The dollar index steadied around 102.5 on Wednesday after gaining some ground in the previous session, as investors braced for key US inflation data that could offer clues on the Federal Reserve’s next policy moves. The chances for a Fed rate cut in March currently stands at 64%, well below a nearly 90% chance seen a week ago. Analysts suggested that May was more likely to be the start of the easing cycle as the US labor market remains tight and inflation stays above the central bank’s 2% target. On the data front, a report on Tuesday showed that the US trade deficit unexpectedly narrowed in November as imports of consumer goods declined amid softening domestic demand. The dollar held recent gains against most major currencies, but depreciated versus the Australian dollar.


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