Dollar gains after tepid U.S. consumer prices report

The dollar nudged higher on Tuesday as consumer price data showed inflation continuing to rise but at a slower pace, in a widely anticipated result that might prompt the Federal Reserve to suspend or possibly halt interest rate hikes next week.

The dollar index increased by 0.106%, while the euro fell by 0.12% to $1.0716.

The Consumer Price Index (CPI) rose 0.4% in February after rising 0.5% in January, according to the Labor Department on Tuesday. The CPI increased by 6.0% year on year in February, the lowest annual increase since September 2021. In the year to January, the CPI increased by 6.4%.

Investors are mixed on whether rising inflation will push the Fed to hike rates again at its policy meeting next week after the collapse of Silicon Valley Bank and Signature Bank sparked turmoil in financial markets.