Dollar firm as markets assess ambiguous US inflation data

Tokyo, Jan. 12 (BNA): The dollar held steady against other major currencies on Friday, as investors weighed an ambiguous U.S. consumer price inflation report against market bets that the Federal Reserve will cut rates as soon as March.

U.S. consumer prices increased in December as rents maintained their upward trend, edging 0.3% higher for the month and up an annual 3.4%, versus economists’ forecast in a Reuters poll for a 0.2% gain and 3.2% rise, respectively.

Still, traders are pricing in a 73.2% chance for the Fed’s first 25 basis point (bps) cut to come in March, with several more to follow, according to the CME Group’s FedWatch Tool, Reuters reported.

The dollar index was firm at 102.25, down from Thursday’s high of 102.76 but well ahead of the five-month low of 100.61 hit in December when traders began to aggressively price in a raft of Fed cuts for this year.

ZH