By Gina Lee

Investing.com – The dollar was down on Wednesday morning in Asia despite climbing to multi-year highs. Investors now await U.S. inflation data due on Thursday for clues of the U.S. Federal Reserve’s timeline on interest rate hikes.

By 10:42 ET (03:42 GMT), the that monitors the greenback against other currencies had dropped 0.16%, to 95.490.

On Tuesday, the rate jumped as high as 1.97 percent. This was an unprecedented increase since Nov.2019.

This pair fell 0.14% to 115.33.

The pair increased by 0.24 percent to 0.7162, and the pair gained 0.17 percentage points to 0.6659.

Inching down 0.8% to 6.3614, the pair gained 0.17% and fell to 1.3564. Chinese state-backed money bought local stocks on Tuesday after the worst intraday fall in benchmark index since August 2021.

European Central Bank’s president Christine Lagarde said on Monday that there is no need for extensive tightening, tapping down rising expectations of aggressive interest rate hikes.

Following Lagarde opening the doors to an eventual interest rate increase, the euro surged 2.7% in the week before.

In a note to clients, Westpac analysts stated that the Fed is in a “holding pattern” while the markets evaluate the possibility of abrupt Fed tightening and the ECB’s hawkish turnflip.

Although a more hawkish ECB might cap dollar gains near-term, the dollar’s “medium-term bull trend is still intact,” and the dollar index is a buy on dips to the low 95 level, the notes added.

For more information on the timing of interest rate increases, investors are now awaiting U.S. inflation data (including the on Thursday).

According to CME’s FedWatch Tool, investors are willing to bet on a more than 70% chance of an increase in 25 and near 25 basis points and almost 30% for a rise of 50 basis points when U.S. policymakers meet March.

Mary Daly, President of the San Francisco Fed, stated Tuesday that U.S. Inflation might rise before it gets better.