The greenback dropped on Tuesday as traders awaited inflation figures to determine if pricing pressures were subsiding and find signals for future Federal Reserve interest rate increases.

On Wednesday, consumer price data is anticipated to indicate that core inflation surged by 0.4% while the headline rate of inflation soared by 0.2% in March.

At its meeting on May 2-3, the Fed is anticipated to raise rates by an additional 25 basis points before taking a break in June.

Although Fed officials have emphasized the necessity to maintain high rates in order to reduce inflation, markets are also pricing in a rate cut from the Fed by year's end due to the anticipated recession.

Expectations that the US central bank will complete one more rate hike have soared as a result of March's solid jobs report. According to figures released on Friday, employers added 236,000 new positions, and the jobless rate decreased to 3.5%.

The dollar index that gauges the greenback versus its major pairs, slumped by 0.36% to 102.08.

EUR/USD climbed by 0.52% to $1.0918.

JPY/USD edged down by 0.33% at 133.16.