The US dollar climbs higher on Wednesday to achieve a 3-month high and has beaten 150 yen at the same time.

The data shows that USD dollar is strengthening amid reports that the Federal Reserve will keep interest rates flat in March rather than cut them. US inflation data shows that the inflation rate rose more than anticipated, but that has not stopped the dollar from managing to best the Chinese yen. Today’s numbers put the USD/CNY pairing at 7.19 and up 0.0056%.

The Consumer Price Index (CPI) increased more than expected for January, climbing by 0.3% rather than the expected 0.2%. The CPI has grown by 3.1% from year to year, which again, is more than expected. With that indicator on the rise, the dollar will have trouble gaining momentum against its competition. Core CPI, which does not include food and energy pricing data, rose 3.9% over the last year, from January to January.

What to Expect for the Dollar in 2024

Interest rate cuts could be coming, with the Federal Reserve expected to make cuts in June. If that happens, the dollar will certainly be affected.

The Japanese yen fell against the dollar, losing 6% this year alone, which indicates excellent expectations for the US dollar in the wake of the Federal Reserve’s rate data. The recent surge against the yen takes the dollar to a 3-month high, which may result in pushback from Japanese officials trying to support their own currency.

The dollar index is also up to a 3-month high, managing 104.95. With the CPI slowing but not as slow as expected, the dollar should continue to stay strong. The euro is down against the dollar as well, with economic factors in Europe holding back the euro’s growth while US economic factors are helping boost the dollar.