Dollar Index Steady Ahead of U.S. Inflation Report

The dollar index held steady on Tuesday as investors awaited the release of the U.S. Consumer Price Index (CPI) data, which is expected to provide clues about the Federal Reserve's monetary policy trajectory.

The upcoming inflation data will influence the Fed's decision on interest rates in the coming months. A higher-than-expected reading could lead to prolonged higher rates, supporting the dollar, while a softer figure might prompt rate cuts and weaken it.

The Reserve Bank of Australia (RBA) held its benchmark interest rate steady, a decision that aligned with consensus forecasts. The central bank emphasized a data-dependent approach, noting that inflation remains above the target range but is gradually easing.