The US dollar rebounded from a roughly six-week low against the euro on Tuesday after data showed inflation pressures rose in the United States in November, cementing expectations for a hike in interest rates by the Federal Reserve on Wednesday. The euro dipped from a roughly six-week high of $1.10600 hit earlier in the session to a session low of $1.09340 after Labour Department data showed that the US core Consumer Price Index rose 2.0 percent in the 12 months through November, marking the largest gain since May 2014.
The data gave traders more confidence that the Fed would hike rates Wednesday for the first time in nearly a decade, a move which is expected to boost the dollar by driving investment flows into the United States. "It's one less roadblock to hold back the FOMC," said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago, in reference to the CPI data and the Fed's policy-setting Federal Open Market Committee. The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.5 percent at 98.095 after hitting a nearly six-week low of 97.190. The dollar was last up 0.39 percent against the yen at 121.515 yen.
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