The dollar saw a boost yesterday following higher-than-expected inflation figures and hawkish Fed comments but is volatile against the pound this morning.
Inflation came in at 7.5%, the highest in 40 years, as the cost of living in the US continues to rise. This has increased expectations that the Fed will raise interest rates in March, potentially more aggressively than first predicted.
In addition, St Louis Fed President James Bullard raised concerns over this soaring inflation, saying that he would support a rate hike in March.
Other data yesterday showed that fewer Americans were filing for unemployment last week. Later today, we will see the University of Michigan consumer sentiment index which is expected to increase slightly in February and also the Fed’s Monetary Policy report.
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