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Dollar holds steady as traders weigh inflation and geopolitics

The US dollar has seen directionless trading on Friday morning, staying stuck in uncertain terrain with traders still processing the week’s inflation gains and escalating global conflicts. The greenback has hardly budged on the day, …

The US dollar has seen directionless trading on Friday morning, staying stuck in uncertain terrain with traders still processing the week’s inflation gains and escalating global conflicts.

The greenback has hardly budged on the day, with the dollar index hovering around 102.35 despite December’s hotter-than-expected consumer price report. Inflation rose 0.3% last month and hit a 3.4% yearly pace, exceeding economist projections. Though the figures briefly lifted the dollar, the gains soon evaporated.

The euro held flat at $1.0960 as markets focused more on geopolitics than the latest prints. Sterling also stalled out at $1.2753 as the UK currency failed to capitalise on an upside GDP surprise.

Simmering tensions in the Middle East now pose headwinds after US and UK airstrikes in Yemen. Oil spiked over 2% but currencies have so far disregarded the news.

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For the dollar, attention remains centred on March’s Fed odds. Markets now see a 68% chance of rate cuts next quarter, up slightly from 65% before the inflation run.

On cryptocurrencies, bitcoin held at around $45,930 after surging to a two-year peak yesterday. The gains came after a supportive SEC ruling on Wednesday regarding bitcoin-linked ETF offering

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