The US dollar held steady against most currencies on Wednesday after traders priced in the latest US inflation data.
The Labor Department's report showed that the Consumer Price Index rose 0.4% in February from the previous month and 3.2% from a year earlier.
The data has left analysts wondering whether the Federal Reserve will cut interest rates this year, Reuters reported.
"While inflation continues to fall, much of core inflation remains high and is not falling at a pace that would give the Fed the confidence it needs to begin the easing cycle, perhaps even in June," Quincy Krosby, a strategist at LPL Financial, commented on the data.
However, the FedWatch tool shows that market expectations for the Fed to start cutting rates at its June meeting fell slightly to 67% from 71% previously.
The Dollar Index .DXY, which tracks the greenback against a basket of global currencies, was up 0.05% at 102.97.
"With the US dollar giving up most of its gains after the CPI data, I suspect that a recovery in the US yield curve is providing a more accurate picture; a June decline is less likely," said Matt Simpson of City Index.
USD/JPY rose to 147.92 after plunging to 147.60 on Tuesday following Bank of Japan Governor Kazuo Ueda's gloomy assessment of the country's economy.
EUR/USD held steady at 1.0930, awaiting the outcome of the European Central Bank's deliberations on a review of the operational structure of the euro system, which has kept interest rates at or below zero and flooded banks with cash through bond purchases and loans.
The GBP/USD fell 0.04% to 1.2786 following the release of UK employment data. Figures from the UK's Office for National Statistics showed that the unemployment rate rose to 3.9% in the three months to January from 3.8% in the previous period.
The AUD/USD and NZD/USD were up 0.05% at 0.6609 and 0.6152, respectively.
The markets will now keep an eye on US retail sales and producer price data, which will be released this week.
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