U.S. inflation data still stuck as markets stay calm

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U.S. inflation data still stuck as markets stay calm

The euro kept steady against the dollar on Tuesday and most currency pairs were stuck as traders waited for U.S. inflation data later in the week and more speeches from central bank governors for some clues on the direction of interest rates.

When central banks sought to push back against rising rate increase expectations last week, ending the euro and the pound tumbling, currency markets have settled back into another spell of low volatility.

The dollar index was little moved, and the euro stood at $1.1587, unchanged on the day.

Adam Cole, currency analyst at RBC Capital Markets, remains constructive on the dollar. The story is based on his prediction that the U.S. would soon shrink as the rate expectations with the U.S. would support the dollar.

He said that we will get better direction when we get to the U.S. CPI.

The data shows the U.S. consumer prices galloped, and Chinese factory gate prices soared in October.

A number of central bankers are expected to speak later on Tuesday as the inflation data will be released, including European Central Bank President Christine Lagarde at 1300 GMT and Fed Chair Jerome Powell at 1400 GMT.

The yen rose to a one-month high against the dollar after hitting a four-year low last month. The dollar was down by 0.2% on the day, leaving the dollar at 112.97 per dollar.

The pound, hammered last week in the wake of the Bank of England surprise to keep rates on hold, was last at $1.3558, flat on the day but still off a low of $1.3425 hit on Friday.

The Norwegian crown steadied at $0.7163 after jumping on Monday, drawing support from traders who were wary of the possibility that the Reserve Bank of New Zealand could raise rates by as much as 50 basis points bps later this month.

If the RBNZ is of a mind to increase by 50 bps, now is the time, according to ANZ analysts.

It seems unrestrained with the uncertain global backdrop and cautious tone of other central banks. The markets will price in the risk until we know the outcome. The risk-sensitive Australian dollar held up most gains on Tuesday after it traded at a value of $0.7422 on Tuesday.

The price of the digital currency rose to a record $68,564 in Asia trade, pulling ether to a record $4,800. The price was last at $68,038.