Dollar falls from 4-month high ahead of major US inflation data

The US dollar fell on Thursday, to pull back from its 4-month peak on profit-taking, which comes ahead of the reasele of key inflation data in the US for January.

The dollar index fell 0.2% to 98.85 points, after opening at 98.99, and hitting a day high and highest since Oct. 10 at 99.06 points.

The greenback gained 0.3% on yesterday, to post its seventh daily gain in 8 days, and the largest in a week.

These gains are due to increased demand for the US currency after the release of successive strong data that raised confidence in the US economic growth path in the first quarter of 2020.

Fed Chair Jerome Powell stated before the House Financial Services Committee on Tuesday that the US economy is doing well, ruling out any reasons that could hinder the growth rate, and added that the current interest rates are appropriate to support economic growth.

Powell said before the Senate Banking Committee on Wednesday, that there is no reason that should stop growth as the unemployment is low, wages are high, and new jobs are added.

Investors are anticipating the release of the key US inflation data for January, should the data show positive performance, the US dollar will extend its surge to new highs, which will impact gold and other dollar-denominated metals.

At 13:30 GMT, the CPI annual reading will be released, with forecasts to rise by 2.4% in January vs. 2.3% in December, and the monthly reading is expected to rise by 0.2% unchanged from previous reading.