Dollar index rises ahead of US CPI and global rate moves

The dollar index rose to 106.6 on Wednesday, its highest level in nearly two weeks, as traders awaited the US CPI report for insights into the Federal Reserve's next moves.

Dollar index rises ahead of US CPI and global rate moves

The data is expected to show a pause in the disinflation trend while supporting the anticipation of a 25bps rate cut, with market expectations for such a move at 86%. Additionally, reports suggesting that Chinese authorities may allow the yuan to weaken further to counter the impact of Trump’s tariffs helped strengthen the dollar. The greenback also gained against the euro ahead of the European Central Bank’s expected fourth rate cut.

Dollar steady ahead of Canada rate cut

However, it held steady against the Canadian dollar, as the Bank of Canada is anticipated to lower rates by 50 basis points later in the day.