Investing.com – The dollar fell to the lowest levels of the day against a basket of the other major currencies on Wednesday following the release of lackluster as investors awaited the Federal Reserve’s rate decision later in the day.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.21% to 93.86 by 08:41 AM ET (13:41 GMT).
U.S. consumer prices rose in November the Labor Department reported, while the annual rate of inflation rate of inflation rose by , in line with expectations.
But underlying inflation remained subdued, with the core consumer price index rising in October and the annual increase in the core CPI slowing to .
The data came as investors looked ahead to the outcome of the Fed’s two-day policy meeting later Wednesday where it was widely expected to by a quarter percentage point.
With a rate hike already priced in investors were focusing more on policymakers views on the inflation outlook and indications on the pace of rate hikes next year. Concerns over tepid inflation have raised concerns over the outlook for further policy tightening in 2018.
The central bank will announce its decision on rates at 19:00 GMT followed by a statement. Chair Janet Yellen will hold a news conference at 19:30 GMT.
The dollar was already on the back foot after Democrat Doug Jones beat Republican Roy Moore in a in Alabama on Tuesday.
The election result narrowed the Republicans’ Senate majority further, which could make it more difficult for the Trump administration to push through its economic agenda.
The dollar extended losses against the yen, with down 0.48% 112.99, having risen to a one-month high of 113.74 on Tuesday.
The euro gained ground against the dollar, with up 0.16% to 1.1759, off the previous day’s three-week low of 1.1716.
Sterling pushed higher, with rising 0.31% to 1.3356.
The pound remained supported after the latest UK jobs released earlier Wednesday showed that pay growth picked up in the three months to October, but there was another drop in the number of people in employment.
The Bank of England and the European Central Bank are to meet later in the week and are expected to hold rates steady.
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