Dollar Rebounds After Inflation Data
The U.S. dollar strengthened on Wednesday after fresh consumer inflation data came in broadly in line with market expectations, easing concerns over unexpected price pressures.
Inflation Data Shapes Rate Outlook
December consumer price figures suggested inflation remains steady, reinforcing expectations that the Federal Reserve is unlikely to change interest rates in the near term. The data reduced bets on early rate cuts, providing support to the dollar after recent weakness.
Support for Federal Reserve Leadership
Market sentiment was further helped by public backing from senior bankers and financial leaders for Federal Reserve Chair Jerome Powell. The support signaled confidence in the central bank’s independence and policy direction, helping calm currency markets.
Mixed Moves Across Currencies
While the dollar gained against several major currencies, the Japanese yen weakened, reflecting domestic political uncertainty and expectations of increased fiscal spending. Other major currencies traded in a narrow range as investors assessed global economic signals.
