Forex Today: Dollar struggles to shake off the selling pressure, awaits mid-tier data

Here is what you need to know on Thursday, January 13:

The dollar faced heavy selling pressure in the second half of the day on Wednesday after the data published by the US Bureau of Labor Statistics showed that the annual Consumer Price Index (CPI) rose to 7% as expected. After losing more than 0.6%, the US Dollar Index is having a tough time staging a recovery and continues to edge lower below 95.00. Investors await December Producer Price Index (PPI) and the weekly Initial Jobless Claims data from the US. Additionally, the European Central Bank will release its Economic Bulletin in the European session.

US Inflation Quick Analysis: Strong figures on all fronts cement Fed action, dollar set to bounce.

Although the CPI inflation in the US reached its strongest level in nearly four decades, the greenback suffered losses against its rivals. Following FOMC Chairman Jerome Powell's cautious tone with regards to balance sheet runoff, the fact that inflation remained within expectations seems to have hurt the dollar. Meanwhile, the CME Group's FedWatch Tool shows that markets are pricing a 21.2% chance of the Fed leaving its policy rate unchanged in March, compared to 17.9% on Wednesday.

US Consumer Inflation Soars: Federal Reserve March rate hike looms.

EUR/USD rose sharply on Wednesday and broke above 1.1400. The pair was last seen trading at its highest level since mid-November at 1.1450. 

GBP/USD closed the previous two trading days in the positive territory and gained more than 100 pips in that period. The pair continues to push higher in the early European session and holds comfortably above 1.3700.

USD/JPY dropped to 114.50 area but the benchmark 10-year US Treasury bond yield is posting modest daily gains around 1.75% on Thursday, limiting the pair's losses for the time being.

After breaking above $1,800 earlier in the week, gold registered impressive gains on Tuesday and continues to edge higher on Wednesday. Early Thursday, XAU/USD is moving sideways above $1,820.

Bitcoin gained more than 2% for the second straight day on Wednesday but seems to have lost its bullish momentum near $44,000. Ethereum extended its rebound on Wednesday and rose 4% before turning quiet around $3,330.