By Gertrude Chavez-Dreyfuss and Joice Alves

NEW YORK/LONDON (Reuters) -The greenback slipped from a contemporary three-month excessive on Wednesday as buyers consolidated positive aspects following the earlier session’s hotter-than-expected U.S. inflation report that pushed again bets on a primary Federal Reserve fee minimize to a while in the course of the yr.

Since Tuesday’s knowledge confirmed the U.S. client value index (CPI) gained 3.1% in January from a yr earlier, versus an anticipated 2.9% rise, fed funds futures have priced in no Fed minimize in March and a virtually 80% likelihood of easing on the June assembly, in accordance LSEG’s fee chance app.

Futures are additionally pricing in about three fee cuts of 25 foundation factors every this yr.

The , which measures the U.S. foreign money in opposition to six different majors, eased 0.1% to 104.97, having touched a contemporary three-month excessive of 104.97.

“The U.S. greenback might have a little bit of room left to run up barely extra by way of the tip of Q1 of this yr,” stated Helen Given, FX dealer at Monex USA in Washington.

“For the reason that U.S. financial system seems to nonetheless be remarkably resilient, we might see additional rhetoric from Fed officers that add a little bit of juice for the U.S. greenback,” she stated.

“I’ve began to make use of the time period ‘American expectionalism’ when discussing the image for the U.S. greenback, as outperformance of the U.S. financial system over its friends over the past yr has change into virtually so commonplace we have come to anticipate it.”

UK INFLATION

Sterling was down 0.4% at $1.2541, after briefly touching an eight-day low as knowledge confirmed UK inflation didn’t speed up in January as anticipated. This may increasingly relieve a number of the strain on the Financial institution of England (BoE) to maintain charges the place they’re for longer.

UK inflation stood at an annual fee of 4.0% in January, unchanged from December. Economists polled by Reuters had forecast a rise to 4.2%.

Cash markets see a 51% likelihood of a BoE fee minimize in June and a 75% likelihood of 1 in August, in keeping with LSEG’s Refinitiv app.

In the meantime, the greenback weakened in opposition to the yen after Japan’s high foreign money officers warned in opposition to what they described as fast and speculative yen strikes.

The buck eased 0.1% to 150.585 yen, not too removed from a three-month excessive reached in opposition to the Japanese foreign money on Tuesday. The greenback has added about 10 yen in value because the begin of this yr.

“We’re watching the market much more carefully,” Japanese Finance Minister Shunichi Suzuki informed reporters. “Speedy strikes are undesirable for the financial system.”

Requested whether or not authorities might intervene within the foreign money market, Suzuki left his workplace with out a phrase.

Earlier, Japan’s high foreign money diplomat Masato Kanda stated the nation would take acceptable actions on foreign exchange if wanted.

Japan intervened within the foreign money market 3 times in 2022 when the yen plunged to 32-year lows close to 152 yen to the greenback, conducting uncommon dollar-selling, yen-buying intervention.

Elsewhere, the euro inched up 0.1% to $1.0720 amid a slew of euro zone financial knowledge. It earlier touched a contemporary three-month low of $1.0695.

Euro zone employment rose 0.3% quarter-on-quarter and by 1.3% year-on-year within the fourth quarter. In line with a Reuters ballot, employment had been anticipated to rise 0.2% quarter-on-quarter and 1.1% year-on-year.

Information additionally confirmed financial progress within the area was flat within the final three months of 2023 in opposition to the earlier quarter and up 0.1% in opposition to the identical interval of 2022.

In cryptocurrencies, bitcoin rose 4.1% to $51,578, hitting its highest since December 2021 above $52,000.