The dollar was trading near its weakest levels in months...

The dollar was trading near its weakest levels in months against the euro and pound on Wednesday after sliding overnight on cooler-than-expected inflation data which fuelled bets the Federal Reserve will outline a slower rate hike path.

After delivering four consecutive 75 basis point (bp) hikes, the U.S. central bank is widely expected to increase interest rates by 50 bp as it concludes its two-day meeting on Wednesday.

Traders will then turn their focus to Thursday meetings of the Bank of England and the European Central Bank, where consensus is also for a 50 bp rate hike.

The euro EUR=EBS was steady against the dollar at $1.0642, not far off a six-month intraday high of $1.0673 it touched in the previous session after U.S. CPI data.

The pound, GBP=D3 which also hit a six month high after the U.S. figures, was flat at $1.2376 after a brief dip when British inflation data too showed a sharper than expected fall.

But year-on-year inflation of 10.7%, compared to a predicted 10.9%, remains painfully high for British consumers.

U.S. consumer prices rose less than expected for a second straight month in November, with underlying consumer prices advancing by the least in 15 months, Tuesday's report from the Labor Department showed.

That data served to reinforce existing expectations that the Fed will slow the pace of its rate increase to 50 bp, and so the main focus of Wednesday's meeting will be the Fed's quarterly 'dot plot', which shows where policymakers expect rates to be at the end of each year, and remarks by chair Jerome Powell.

An increase in the median 'dot' for the level at the end of 2023 from the 4.625% projection at end September is widely expected, but a key question is how much it will rise by.

"The extent of the uptick revision will matter for rates and USD," said Christopher Wong, a currency strategist at OCBC in Singapore

"A revision higher than median of 5.125% may be interpreted as hawkish and could weigh on sentiment and halt the dollar's decline. But if it turns out that despite the hawkish talk and there is only slight uptick to median, then the USD may face more selling pressure."

The dollar index =USD , which measures the greenback versus six major currencies, was down a touch at 103.91, having made a six-month low of 103.57 in the wake of the inflation data.

It has fallen 9% since hitting a 20-year high in September as expectations of high and rising U.S. interest rates, which fuelled dollar gains, have started to ease.

The dollar was at 135.27 yen JPY=EBS , down 0.2% after sliding 1.5% on Tuesday, and at 0.9277 Swiss francs CHF=EBS , down a whisker having fallen to an eight-month low of 0.9230 on Tuesday.

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	Currency bid prices at 0906 GMT 

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

							  $1.0642		 $1.0630	+0.11%		  -6.39%	  +1.0645	 +1.0619 
																								 
 Dollar/Yen		JPY=EBS																	   

							  135.2750		135.5050   -0.16%		  +17.62%	 +135.7250   +135.2300 
																								 
 Euro/Yen		 
				  S>		  143.98		  144.16	 -0.12%		  +10.48%	 +144.2600   +143.8700 
																								 
 Dollar/Swiss	  CHF=EBS																	   

							  0.9277		  0.9286	 -0.08%		  +1.72%	  +0.9296	 +0.9271 
																								 
 Sterling/Dollar   GBP=D3																		

							  1.2376		  1.2365	 +0.07%		  -8.50%	  +1.2381	 +1.2345 
																								 
 Dollar/Canadian   CAD=D3																		

							  1.3540		  1.3544	 -0.03%		  +7.09%	  +1.3574	 +1.3536 
																								 
 Aussie/Dollar	 AUD=D3																		

							  0.6867		  0.6858	 +0.15%		  -5.52%	  +0.6870	 +0.6822 
																								 
 NZ				NZD=D3																		

 Dollar/Dollar				0.6446		  0.6463	 -0.29%		  -5.84%	  +0.6464	 +0.6434 
																								 
																								 
 All spots  FX=  
Tokyo spots  AFX=  Europe spots  EFX=   Volatilities  FXVOL=   Tokyo Forex market info from BOJ  TKYFX  
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World FX rates	https://tmsnrt.rs/2RBWI5E 

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