NEW YORK: The greenback jumped on Tuesday before the Federal Reserve on Wednesday is to release minutes from its December meeting, while the euro was dented by moderating inflation data.

The US central bank slowed its pace of interest rate hikes to 50 basis points last month after delivering four consecutive 75-basis point hikes, but stressed the need to hold rates in restrictive territory to bring down inflation.

Investors will be watching for signs of how concerned the Fed is about persistent inflation and its thoughts on the labor market, though the meeting minutes may not be as market-moving as upcoming jobs and inflation data, said Bipan Rai, North American head of FX strategy at CIBC Capital Markets in Toronto.

A still robust employment picture is viewed as giving the Fed more room to keep raising rates as it battles to bring down stubbornly high inflation. The highly anticipated December jobs report is due on Friday, and consumer price data for last month will be released on January 12.