U.S. Dollar Rises As Traders Await U.S. CPI Inflation Data

(RTTNews) - The U.S. dollar strengthened against other major currencies in the Asian session on Friday, as traders are anticipating the U.S Consumer Price Index (CPI) inflation numbers later on the day.

Growing predictions that the Fed would not lower interest rates anytime soon, led to the upturn of the USD.

Traders are now looking ahead to US consumer price index report later in the day that may shed additional light on the US Fed's outlook for rates.

The Bureau of Labor Statistics reported on Wednesday that US Nonfarm Payrolls (NFP) increased by 130,000 in January, surpassing the expected 70,000 increase.

During that time, the unemployment rate gradually declines to 4.3%. Concerns about the US labor market are somewhat allayed by the positive jobs data, which also lessens the likelihood that the US central bank would lower interest rates by the middle of the year.

Markets are already pricing in over a 92% chance that the Fed will keep rates unchanged at its next meeting, according to the CME FedWatch tool, while the likelihood of a rate decrease at its June meeting is now close to 50%.

A poll by Reuters suggested that the Fed may maintain rates throughout the end of Fed Chair Jerome Powell's term in May, and markets expect a likely reduction only after Powell's successor assumes the role of Fed Chair.

Asian stock markets traded lower, hurt by tumbling technology stocks that mirror their peers on the tech-heavy Nasdaq amid fresh concerns about artificial intelligence disruptions to traditional business models weighing on several sectors, such as financial, transportation and logistics as well as commercial real estate companies.

In the Asian trading today, the U.S. dollar rose to a 4-day high of 1.3600 against the pound, from yesterday's closing value of 1.3624. The greenback may test resistance around the 1.35 region.

Against the euro, the Swiss franc and the yen, the greenback advanced to 1.1857, 0.7706 and 153.42 from Thursday's closing quotes of 1.1871, 0.7964 and 152.75, respectively. If the greenback extends its downtrend, it is likely to find resistance around 1.16 against the euro, 0.79 against the franc and 158.00 against the yen.

Against the Australia and the New Zealand dollars, the greenback climbed to 4-day highs of 0.7090 and 0.6036, respectively. On the upside, 0.69 against the aussie and 0.59 against the kiwi are seen as the next resistance levels for the greenback.

The greenback edged up to 1.3628 against the Canadian dollar, from yesterday's closing value of 1.3611. The next resistance level for the greenback is seen around the 1.37 region.

Looking ahead, Eurozone flash GDP and employment data for the fourth quarter is due to be released at 5:00 am ET in the European session.

In the New York session, U.S. CPI data for January and U.S. Baker Hughes oil rig count data are slated for release.