2024.01.1021:01:00UTC+00Dollar Slips Against Major Counterparts Ahead Of Inflation Data

The U.S. dollar turned in a weak performance against most of its major counterparts on Wednesday with traders awaiting U.S. consumer and producer price inflation data, due later in the week.

The Labor Department's reports on consumer and producer price inflation, due out on Thursday and Friday, respectively, could have a significant impact on the outlook for interest rates.

Economists expect the reports to show slowdowns in the annual rate of core price growth, which could bolster optimism about near-term rate cuts by the Federal Reserve.

However, if the data surprises to the upside, it could add to recent skepticism about whether the Fed will begin cutting rates in March.

CME Group's FedWatch Tool indicates a 64.5% chance the Fed will cut rates by a quarter point at its March meeting.

The dollar index dropped to 102.34, losing nearly 0.25%.

Against the Euro, the dollar weakened to 1.0973 from 1.0933, and eased to 1.2742 from 1.2711 against Pound Sterling.

The dollar firmed against the Japanese currency, fetching 145.75 yen a unit, nearly 0.9% more than the previous close. Against the Aussie, the dollar weakened to 0.6701. The Swiss franc gained against the greenback, firming to 0.8507, and the Loonie gained marginally at 1.3381 a U.S. dollar.