The greenback muted on Tuesday before the announcement of the U.S. inflation figures and the anticipation of Fed’s decision on the next interest rate hike.

The previous month saw a swarm of bond purchases and sell off the greenback as it was forecasted that inflation hit its highest level. The data that shall be released later today will assess these predictions.

According to a poll conducted by Reuters, analysts forecasted core inflation to stabilize at 0.3% MOM.

A steady in dollar index at 104.99, it reached its highest level in 20 years at 114.78 in September.

The hiked interest rate forecasts backed up the U.S. dollar as Fed raised its rate to tame inflation, which makes the greenback prone to sell off in case the inflation eased.

Forecasts hover around a raise of the interest rate by 50bp by Fed next Wednesday post hiking it by 75 bp for four times in a row.

GBP/USD steadied at $1.2272 before the release of BOE policy next Thursday. Sterling reached its highest level in 6 months at $1.2345 during the earlier week.

EUR/USD muted at $1.0539 as investors are awaiting ECB meeting next Thursday.