10.05.202220:23:00UTC+00Dollar Hovers Near 2-decade High As Traders Await Inflation Data

The U.S. dollar is hovering near a two-decade high on Tuesday, despite turning in a somewhat sluggish performance, as traders look ahead to the crucial inflation data, due on Wednesday.

Expectations that the Federal Reserve will keep hiking interest rates in the coming months to combat soaring inflation.

The Labor Department is due to release its report on consumer price inflation on Wednesday, with the annual rate of price growth expected to slow to 8.1% in April from 8.5% in March.

The latest snapshot of inflation could impact expectations regarding how aggressively the Federal Reserve plans to raise interest rates.

The dollar index, which settled at 103.65 on Monday after climbed to 104.19, rose to 103.98 today, gaining more than 0.3%.

Against the Euro, the dollar firmed to $1.0530, gaining from $1.0562.

The dollar is trading at $1.2316 against Pound Sterling, strengthening from $1.2331.

Against the Japanese currency, the dollar firmed to 130.41 yen from 130.30.

The dollar is stronger against the Aussie at 0.6937, compared to 0.6953 on Monday.

The Swiss franc is weaker at 0.9956 a dollar, easing from 0.9939. The Loonie is weak at C$1.3030 a dollar, weighed down by sharply lower oil prices.