• The DXY Index recorded losses in Wednesday’s session, falling toward 104.70.
• Investors are taking profits from Tuesday’s rally following CPI.
• Focus now shifts to Retail and PPI data from January.

   
The US Dollar (USD) measured by the Dollar Index (DXY) experienced a dip on Wednesday as it declined near 104.70. This downward trajectory is primarily attributed to investors securing gains following the Greenback’s rally on Tuesday following January CPI results showing stubborn inflation. This fueled a recalibration of the Federal Reserve's (Fed) rate easing expectations. For the remainder of the week, markets will eye the Producer Price Index (PPI) and Retail Sales to continue placing their bets on the next Fed decisions.

There is a growing market consensus that the Fed is unlikely to cut rates in the near term, supported by hot inflation data releases and cautious Fed officials. This adjustment in easing expectations will likely lend further strength to the USD after this consolidation. As for now, markets are delaying their prediction of the start of the easing cycle to June