Dollar wavered close to a five-month low against peers

The U.S. dollar wavered close to a five-month low against major peers on Thursday as investors looked to U.S. inflation data and a ECB meeting later in the day.

Investors are waiting for data, sucking volatility from the market and leaving major currencies mostly range-bound.

The U.S. dollar index has traded narrowly around the psychologically important 90 level. It was last at 90.206 – close to the last month’s low of 89.533, a level unseen since early January.

Meanwhile, the euro increased to a one-week peak at $1.2218 on June 9 only to finish little changed. It was mostly flat at $1.21635 in Asia.

Meanwhile, the Japanese yen traded at 109.565 per dollar. It was slightly changed from Wednesday and close to the middle of the 109.19-110.325 range of the past two weeks.

The U.S. Labor Department’s consumer prices data has been much anticipated after last month’s report revealed consumer prices rose by the most in almost 12 years in April.

This has stoked bets that higher prices could last longer than some forecast, potentially calling into question the Fed’s insistence that current inflation pressures are transitory and monetary stimulus should stay in place for some time yet.

Analysts don’t expect a taper of the central bank’s asset-purchase program until 2022

Economists estimated the CPI boosted 0.4% in May. Westpac analysts and FOMC officials in the inflation debate. They don’t anticipate a taper of the central bank’s asset-purchase program until the second half of 2022.

They anticipate the U.S. dollar index will decline to 87.30 at that time, before then increasing again as U.S. monetary tightening takes effect.

The ECB is anticipated to keep policy settings steady. The euro could be sensitive to changes in the bank’s economic estimates.

Additionally, the largest cryptocurrency in the world, bitcoin, held gains from its biggest rally in four months on Wednesday, when it surged almost 12%.

It last traded at $36,709.67 after recovering from a three-week low of $31,025 hit on Tuesday when signs of institutional investor caution and regulatory attention drove selling.