The latest reading in US inflation data surprised markets by recording a slower-than-expected decline.
The US consumer price index (CPI) rose 6.4% year-on-year in January from 6.5% the previous month, but missed expectations for a 6.2% rise.
Even so, it is still the lowest reading since October 2021, and has declined for seven consecutive months.
Meanwhile, on a monthly basis, consumer inflation met expectations by increasing to 0.5% from the 0.1% decrease recorded the previous month.
The US dollar's reaction initially showed a rise as soon as the data was released before falling slightly shortly afterwards.
This may be the initial reaction of the market which saw the figure lower than expected, and after reassessing the inflation actually still shows a decrease albeit at a smaller rate.
However, it may provide an opportunity for the Federal Reserve (Fed) to continue raising rates by 25 basis points or keep them high for some time.
Following the data, investors focused on statements from Fed policymakers for clues about their new outlook after the inflation report was released.
Dallas Fed President Lorie Logan said the central bank should always be prepared to continue raising rates for a longer period than previously expected.
While the New York Fed President, John Williams said that efforts to control inflation are still not over.
