Calm prevails in the currency market before important US data

The currency market was calm on Thursday, with the US dollar holding steady against its major peers as traders awaited more data from the world's largest economy for clues on the direction of the Federal Reserve's policy.

U.S. consumer price index data released Tuesday, which showed higher-than-expected U.S. inflation, reignited concerns that inflation may persist, prompting investors to reassess the chances of the Federal Reserve cutting interest rates at its June meeting as previously expected.

According to the London Stock Exchange Group’s Interest Rate Probability app, markets still see a 65 percent chance of a rate cut in June, down from 71 percent earlier in the week. The probability of a rate cut in July is about 83 percent.

With the US Federal Reserve expected to keep interest rates unchanged at its meeting next week, focus is shifting to the bank's updated economic forecasts.

Federal Reserve Chairman Jerome Powell said last week that the bank is not far from gaining the confidence needed to start easing monetary policy.

Markets are awaiting US retail sales data, producer price index (inflation at the factory gate) and jobless claims due later Thursday for further signs of a slowing economy.

Ahead of the data release, the dollar index, which measures the greenback against a basket of six currencies, rose 0.1 percent to 102.85.

Against the yen, the dollar rose 0.1 percent to 147.89 yen, as it remains uncertain whether the Bank of Japan will abandon negative interest rates at its monetary policy meeting on March 18-19.

The Bank of Japan will discuss ending negative interest rates next week if wage talks between major companies yield strong results, sources told Reuters.

The initial results of the wage negotiations are due to be announced on Friday, and reports have already emerged that many of the country's largest companies have fully agreed to union demands for higher wages.

The euro fell 0.05 percent to $1.0942, ahead of expected comments from a number of European Central Bank officials on Thursday.

The pound was steady at $1.2792. Data on Wednesday showed the British economy returned to growth in January after falling into recession in the second half of 2023.

In cryptocurrencies, Bitcoin was steady at $73,092.00 after hitting a record high of $73,678 in the previous session, while Ether fell 0.72 percent to $3,963.70.