Dollar Hits One-Week Low as Investors Await U.S. Inflation Data

The U.S. dollar fell to a one-week low as investors exercised caution ahead of the highly anticipated U.S. inflation report, set to be released at 9:30 PM ET.Market ExpectationsHeadline Inflation: Forecasted to rise to 2.9% in December, according to a Wall Street Journal survey.Core Inflation: Expected to remain steady at 3.3%, suggesting that underlying price pressures are stabilizing.Analyst InsightsUniCredit analysts suggest that a stable core inflation rate may offset concerns over higher headline inflation, potentially limiting further dollar appreciation.Earlier this week, the U.S. Producer Price Index (PPI) came in lower than expected, adding to investor caution.The market is closely watching the inflation report for cues on the Federal Reserve’s next moves, with stable core inflation likely to reinforce expectations for steady interest rates.