- The dollar was supported against a basket of other major currencies on Wednesday as stronger than expected U.S. inflation data boosted expectations for a more hawkish stance on interest rates from the Federal Reserve.

USD/JPY edged up 0.08% to 102.22, from 102.13 late Tuesday.

The dollar strengthened after the Labor Department said Tuesday that U.S. consumer prices rose 0.4% in May from a month earlier, bringing the annual rate of inflation to 2.1%. It was the fastest monthly increase in inflation in more than a year, beating forecasts of 0.2%.

The uptick in inflation indicated that the economic recovery is deepening and boosted expectations for a more hawkish stance on interest rates from the Fed.

Investors were looking ahead to the bank’s post-policy meeting press conference with Chair Janet Yellen later Wednesday, as they awaited fresh indications on the timing of possible interest rate increases.

The Fed was expected to cut its asset purchase program by another $10 billion, but is not expected to raise borrowing costs until mid-2015.

GBP/USD was steady at 1.6968, off the five year peak of 1.7011 set on Monday. Investors were awaiting the minutes of the Bank of England’s June meeting, due out later in the session, for signs that the monetary policy committee is moving closer to hiking rates.

EUR/USD was little changed at 1.3544, holding above the four month trough of 1.3502 struck earlier this month, while USD/CHF was trading at 0.8991.

The Australian dollar was steady, with AUD/USD at 0.9338, while NZD/USD edged up to 0.8668 and USD/CAD was at 1.0866.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 80.71.

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