The US dollar strengthened on Tuesday, reaching 150 against the yen for the first time since November, after data showed US inflation rose more than expected in January, bolstering expectations that the Federal Reserve will keep interest rates on hold in March.
The Consumer Price Index (CPI) rose 0.3% on a monthly basis in January, above the 0.2% increase expected by economists polled by Reuters. In annual terms, it increased by 3.1% compared to the expected growth of 2.9%. The dollar rose to 150.34 yen, the highest since November. It eventually rose 0.6% to 150,305 yen.
The US dollar index, which measures the US dollar against six major currencies, traded up 0.52% to trade at 104.587.
Federal Reserve policymakers will likely wait until June before cutting interest rates. Traders expected that on Tuesday, after reports showed consumer inflation was higher than expected last month.
Futures market players linked to the Fed's policy rate have pushed back their expectations for deeper interest rate cuts later in the year after the Bureau of Labor Statistics report.
