• The index flirts with 103.50 amidst the broader consolidative theme.
• Investors keep favouring a 25 bps rate hike by the Fed in March.
• Retail Sales, Industrial Production take centre stage in the NA session.

The greenback, in terms of the USD Index (DXY), sets aside two daily drops in a row and trades with decent gains ahead of the opening bell in the old continent on Wednesday.

USD Index focuses on data

The index manages to regain some balance and leaves behind two consecutive daily drops, although it remains largely within the multi-session consolidative phase so far on Wednesday.

Indeed, following the post-CPI volatile session on Tuesday, the dollar now appears stabilized above the 103.00 mark ahead of upcoming key data in the US calendar.

In fact, despite US inflation was higher than expected, it kept the downtrend well in place in January after rising at an annualized 6.4% and 5.6% when it comes to the Core CPI. However, consumer prices are still elevated and support the Fed’s plan to keep hiking rates for the time being. On this, and according to CME Group’s FedWatch Tool, the probability of a 25 bps rate hike in March is now nearly 90%.

In the NA calendar, the focus of attention will be on the Retail Sales, seconded by MBA Mortgage Applications, Industrial Production, the NAHB Index, Business Inventories, the NY Empire State Index and TIC Flows.