Investing.com – The dollar bounced off session lows against a basket of major currencies but remained under pressure as geopolitical uncertainty continued to weigh on sentiment despite data pointing to a faster pace of inflation.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.19% to 89.15. But remained above session lows of 89.04.
The so-called rose 2.1% year-on-year in March, improving on the 1.8% rise seen in February.
While the gain in the core CPI was the largest since February 2017, some market participants continued to forecast only two rates for the year on expectations that inflation would continue to lag the Federal Reserve’s target of 2%.
“Even though core CPI is now back above 2%, it remains below the average level seen prior to last spring’s sharp deceleration,” CIBC said. “We would still leave core PCE tracking a little below 2%, so there is no reason to forecast more than two rate hikes this year.”
The data comes ahead of the Federal Reserve’s March meeting minutes due 2.00 pm ET, which may provide investors with an insight into the Fed’s thinking on monetary policy.
The upbeat CPI data helped the pare losses to Y106.91, down 0.27%. The currency pair fell to a low Y107.25 on safe-haven buying earlier after President Trump had threatened Russia in a series of tweets Wednesday.
, meanwhile, continued its downward spiral, falling 0.30% to C$1.2561 as a rally in oil prices continued to support the oil-price sensitive loonie.
rose 0.22% to $1.2382 as European Central Bank President Mario Draghi said Wednesday he remained confident inflation would hit the central bank’s 2% target.
rose 0.19% to $1.4202, following mixed economic data as U.K. missed expectations, while the narrowed more than expected in February.
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