The dollar held near a one-month high against a basket of currencies on Wednesday as investors tried to ascertain if the Federal Reserve might alter the language on its stimulus following a recent jump in U.S. inflation.
The dollar index stood at 90.528, having hit a one-month high of 90.677 on Tuesday despite mixed U.S. economic data.U.S. retail sales dropped more than expected in May but sales in April were revised sharply up and are way above their pre-pandemic level.
With spending rotating back to services from goods as vaccinations allow Americans to travel and engage in other activities, the data cemented the perception of a strong recovery in the economy.Separate data showed wholesale price inflation accelerated to 6.6%, the largest gain since November 2010.
The Federal Reserve is widely expected to acknowledge the first conversations among its policymakers about when and how fast to pare back the massive bond-buying program launched in 2020 when it concludes a policy meeting later in the day.Yet most investors think the Fed will refrain from any hints of starting tapering its stimulus in the near future.