Dollar Awaits U.S. Inflation Data and is Affected by Debt Ceiling Crisis

The dollar experienced volatile trading on Wednesday after U.S. President Joe Biden and senior lawmakers made no progress in the debt ceiling crisis, although fluctuations were minimal ahead of inflation data that could provide indicators on interest rate direction. Biden and House Speaker Kevin McCarthy remain divided on raising the U.S. debt ceiling of $31.4 trillion following talks on Tuesday. The United States has only weeks before it may face an unprecedented default. Nonetheless, both parties agreed to hold further discussions. The dollar retained most of its gains from Tuesday due to a sharp rise in short-term Treasury yields and market anxiety ahead of the U.S. inflation data released on Wednesday. The euro dipped 0.1 percent to $1.0947 in the latest trading, and the British pound also fell 0.1 percent to $1.2605. Against a basket of major currencies, the dollar index rose 0.14 percent to 101.76 points, after earlier declining by 0.11 percent. Economists surveyed by Reuters expect core consumer prices in the U.S. to increase by 5.5 percent year-on-year for April.