The US Dollar is moving in a narrow range against various majors ahead of tomorrow's US CPI inflation data release.

The US Dollar edged higher in early trading this week (12/February) amid a wait for tomorrow's US CPI inflation data release. The US Dollar Index (DXY) circulated within the ranges formed late last week, illustrating the greenback's stabilization in most major pairs.

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The release of fantastic US Nonfarm Payroll data earlier this month has pushed back expectations of the first Fed rate cut from March to May. A similar phenomenon occurs in the interest rate expectations of several other major central banks, as many countries' early-year data unexpectedly outperformed.

Simon Harvey, head of FX analysis at Monex Europe, told Reuters that the lack of divergence between the Fed, ECB and other central banks has prevented the dollar from rising significantly. He thinks currencies will move in a range-bound manner until the situation changes.

"In the interim we keep floating around, and US CPI will determine how the dollar trades within those ranges," Harvey said.

The provisional consensus expects US CPI inflation data to feature monthly growth of 0.2% in the all-goods basket and 0.3% in the core goods basket. Headline CPI data will likely slow from 3.4% to 2.9%, but Core CPI only weakened slightly from 3.9% to 3.8% annually.

Market participants are also currently eyeing the Japanese yen. USD/JPY printed its highest level since November due to a statement by a BoJ official last week. Japanese authorities moved quickly to contain the situation by threatening to intervene again, so the USD/JPY rally stalled at around 149.40 today. However, the Ninja duo remains vulnerable to future news.

"Dollar/yen is likely to be driven primarily by US developments in the near term, but intervention warnings (from Japanese authorities) are likely to increase in frequency around the 150 level," Barclays analysts wrote in a note today.