NEW YORK: The dollar steadied against a basket of currencies on Tuesday as data showed US consumer prices rose in May, matching analysts' forecasts and reinforcing the view the Federal Reserve would raise short-term interest rates gradually.
US consumer prices rose marginally in May amid a slowdown in the pace of increases in the cost of gasoline, pointing to moderate inflation pressures.
Three of the world's top central banks - the Federal Reserve, the European Central Bank and the Bank of Japan - are each meeting this week. The market was relatively quiet on Tuesday morning as investors waited for guidance from the banks.
"We're eagerly awaiting the Fed, the ECB and the BOJ, in that order. People are reluctant to do a whole lot ahead of that," said Gregory Anderson, global head of FX strategy at BMO Capital Markets in New York.
The Federal Reserve holds a two-day meeting starting on June 12, and it is widely expected to raise interest rates for the second time this year. The focus is on whether the central bank will hint at raising rates a total of four times in 2018.
The European Central Bank meets on June 14, when it could signal intentions to start unwinding its massive bond purchasing program. The Bank of Japan will meet from June 14 through June 15, but will not offer an immediate report following the meeting, instead publishing a summary of opinions on June 25.
The dollar earlier gave up gains made in Asian trade as markets saw few concrete measures emerging from the US-North Korea summit. Against a basket of rivals, the dollar was flat on the day at 93.58 after bouncing 0.3 percent to 93.89 in early trade, its highest since June 5.
US President Donald Trump said he had formed a "very special bond" with North Korean leader Kim Jong Un at a meeting, but the Korean stock and currency markets were broadly flat and US debt, which tends to benefit from geopolitical uncertainty, held steady.
"This is more of a side show and headline grabber rather than yielding anything substantive with markets more worried about the developments at the G7 summit," said Viraj Patel, a currency strategist at ING in London, referring to trade tensions among the participants.
Against the Japanese yen, the dollar was trading 20 basis points higher at 110.24 yen, after hitting 110.49 earlier in the day, its highest in nearly three weeks and above a 200-day moving average.
Against the dollar, the euro was flat on the day at $1.1792.
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