News: FOREX-Dollar climbs after U.S. inflation data and tough Fed talk

(Updates prices; adds Deutsche Bank rate expectations in par. 13, Nicola Sturgeon resignation in par. 18)

	  Persistent U.S. inflation drives up rate expectations 

	  Dollar gains; Yen, yuan hit six-week lows 

	  Pound falls after British inflation dips 

The dollar rose on Wednesday in the wake of stubbornly high U.S. inflation data and firm words on interest rates from Federal Reserve officials.

U.S. consumer price index (CPI) inflation accelerated month-on-month in January, rising 0.5% as expected, due in part to higher rental and food costs.

Year-on-year, prices rose 6.4%. That was down from 6.5% in December but above economists' expectations of 6.2%.

The dollar climbed against most major currencies on Wednesday, with the euro EUR=EBS down 0.14% to $1.072. The euro touched a 10-month high of $1.103 on Feb. 2 but has since slipped.

"It is a reaction to the CPI data, and also the tone of Fed officials recently," said Jane Foley, head of FX strategy at Rabobank.

"The market is now expecting a higher peak for the Fed funds rate than they were expecting even a week or two ago."

Japan's yen JPY=EBS was off by 0.2% at 133.34 per dollar. It touched a six-week low earlier in the session at 133.44.

In December, Fed board members' median projection foresaw interest rates peaking at 5.1% this year.

But interest rate futures markets FEDWATCH now price a peak above 5.2% and traders are becoming less sure that cuts are coming in 2023. Rates currently stand at 4.5% to 4.75%.

Fed officials struck a tough tone on Tuesday. "With the strength in the labour market, clearly there are risks that inflation stays higher for longer than expected, or that we might need to raise rates higher," New York Fed President John Williams said in New York.

Deutsche Bank's economists said they now expect the Fed to raise rates as high as 5.6%, having previously expected a 5.1% peak.

"Inflation is likely to remain too high over at least the next few months," the bank's chief U.S. economist Matthew Luzzetti said in a note to clients.

The U.S. dollar index =USD , which gauges the currency against its peers, was up 0.25% to 103.51 after closing roughly flat on Tuesday.

Sterling GBP=D3 dropped 0.79% to $1.208 after British inflation cooled more than expected in January to 10.1%, alleviating some of the pressure on the Bank of England to keep hiking rates.

Also on investors' radars was an announcement by Scottish First Minister Nicola Sturgeon that she would step down after eight years in the job.

The Australian dollar AUD=D3 fell 1.2% to $0.69. Meanwhile, China's yuan CNY=CFXS traded onshore hit a more than one-month low at 6.8498 to the dollar and was last at 6.839.

Australia's central bank chief Philip Lowe told members of parliament that rates still had a way to rise.

U.S. retail sales figures are due later in the day.

	======================================================== 
	Currency bid prices at 1145 GMT 

 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	   EUR=EBS																	   

							  $1.0718		 $1.0737	-0.17%		  +0.03%	  +1.0745	 +1.0700 
																								 
 Dollar/Yen		JPY=EBS																	   

							  133.3750		133.0200   +0.22%		  +1.58%	  +133.4750   +132.7550 
																								 
 Euro/Yen		 
				  S>		  142.94		  142.89	 +0.03%		  +1.88%	  +143.1600   +142.3500 
																								 
 Dollar/Swiss	  CHF=EBS																	   

							  0.9223		  0.9215	 +0.09%		  -0.25%	  +0.9248	 +0.9214 
																								 
 Sterling/Dollar   GBP=D3																		

							  1.2076		  1.2176	 -0.79%		  -0.11%	  +1.2181	 +1.2069 
																								 
 Dollar/Canadian   CAD=D3																		

							  1.3404		  1.3338	 +0.46%		  -1.11%	  +1.3405	 +1.3336 
																								 
 Aussie/Dollar	 AUD=D3																		

							  0.6897		  0.6985	 -1.23%		  +1.21%	  +0.6989	 +0.6893 
																								 
 NZ				NZD=D3																		

 Dollar/Dollar				0.6277		  0.6338	 -0.84%		  -1.02%	  +0.6338	 +0.6277 
																								 
																								 
 All spots  FX=  
Tokyo spots  AFX=  Europe spots  EFX=   Volatilities  FXVOL=   Tokyo Forex market info from BOJ  TKYFX  
	<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
World FX rates	https://tmsnrt.rs/2RBWI5E 
US CPI	https://tmsnrt.rs/3IphnXj Euro	https://tmsnrt.rs/3Xts5jX 
	^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>