Dollar edges up as markets wait for U.S. inflation data – Reuters

Dollar edges up as markets wait for U.S. inflation data – Reuters

LONDON (Reuters) - The dollar edged higher on Tuesday, helped by a pick-up in U.S. Treasury yields, but was still near three-week lows as markets waited for inflation data in the United States.FILE PHOTO: A picture illustration shows U.S. 100 dollar bank notes taken in Tokyo August 2, 2011. REUTERS/Yuriko NakaoThe dollar has fallen so far in April, after surging in the first three months of 2021 on expectations that a combination of monetary stimulus and government spending would cause inflation to spike.U.S. CPI data for March is due at 1330 GMT and is expected to show a rise in inflation to 2.4%.Market participants will also be paying attention to how yields react to a 30-year Treasury auction.ING strategists wrote in a note to clients that higher inflation would support higher U.S. yields, which could in turn cause the dollar to outperform lower-yielding currencies such as the yen, Swiss franc and euro.The inflation data “should further fuel the narrative that the U.S. economy is starting to overheat and are to likely add to concerns that the Fed's firmly dovish message will be increasingly challenged,” ING said.At 0725 GMT, the dollar was up 0.1% against a basket of currencies, at 92.201,