By Inflation Data, Dollar Moves Higher Ahead

On Tuesday as investors looked ahead to U.S. inflation data later in the day which could offer insights into the pace of rate hikes by the Federal Reserve this year, the dollar moved higher against a basket of the other major currencies.
The measure of the greenback’s strength against a basket of six major currencies, U.S. dollar index, by 04:33 AM ET (08:33 AM GMT) was up 0.19% to 90.06.
At 08:30 ET, the Labor Department is due to release U.S. CPI data which was expected to confirm that inflation remains tepid even as the labor market continues to tighten.
Expectations that the Fed could raise interest rates four times, rather than three times, this year are driven by a higher reading. A rate hike at its upcoming policy meeting next week is almost fully priced in by markets.
Data last week pointing to a deceleration in wage growth last month despite strong jobs growth had tempered expectations that the U.S. central bank might project four hikes for this year, rather than three.
With EUR/USD dipping 0.11% to 1.2325, the euro slipped lower. With USD/JPY climbing 0.5% to 106.94, up from an overnight low of 106.25,
the dollar gained ground against the yen.
Amid a growing cronyism scandal linked to the Japanese prime minister and his wife involving the sale of public land, the yen had initially risen, overnight. The safe haven yen tends to rise in times of market uncertainty.
With GBP/USD dipping 0.08% to 1.3894, sterling edged lower against the dollar,.
With AUD/USD slipping to 0.7866, the Australian dollar was a touch lower, while the New Zealand dollar moved higher, with NZD/USD rising 0.38% to 0.7323.
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