Investing.com - The dollar trimmed losses against the other major currencies on Tuesday, after data showed that U.S. consumer price inflation was flat in November, while prices excluding food and energy costs inched up modestly.
USD/JPY held steady at 121.01.
The U.S. Commerce Department reported that consumer prices were unchanged from a month earlier, meeting expectations and following a gain of 0.2% in October.
Year-over-year, consumer prices were 0.5% higher from the same month a year earlier, compared to expectations for a 0.4% increase and after rising 0.2% in October.
Core CPI, which excludes food and energy costs, increased by 0.2%, meeting expectations.
Separately, the Federal Reserve Bank of New York said that its general business conditions index improved to -4.6 this month from a reading of -10.7 in November. Analysts had expected the index to rise to -6.0 in December.
Market participants awaited the Federal Reserve's highly-anticipated policy decision due on Wednesday. Most investors expect the Fed to raise interest rates for the first time since June 2006.
EUR/USD was little changed at 1.0991, after rising to highs of 1.1060 earlier in the day.
Earlier Tuesday, the ZEW Centre for Economic Research said that its index of German economic sentiment rose by 5.7 points to 16.1 this month from November's reading of 10.4. Analysts had expected the index to rise by 4.6 points to 15.0 in December.
Elsewhere, the dollar held steady against against the pound, with GBP/USD at 1.5153, while USD/CHF edged up 0.17% to 0.9867.
Sterling found support after the U.K. Office for National Statistics said the annual rate of consumer price inflation rose by 0.1% last month, in line with expectations and up from -0.1% in October.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose 1.2% last month, matching forecasts and up from 1.1% in October.
The Australian dollar was weaker, with AUD/USD down 0.43% at 0.7216, while NZD/USD rose 0.31% to 0.6778.
The Reserve Bank of Australia said earlier, in the minutes of its December policy meeting, that the domestic economy is strengthening and noted that overal business conditions and the employment market looked healthy.
However, in its mid-year economic and fiscal outlook, Australia's Treasury said growth forecasts were downgraded to 2.5% in 2015/16 from a previous estimate of 2.75% in May and to 2.75% in 2016/17 from 3.25%.
Meanwhile, USD/CAD was almost unchanged at 1.3719, off lows of 1.3674 hit earlier in the session.
In Canada, data showed that manufacturing sales dropped 1.1% in October, compared to expectations for a 0.5% fall, after a 1.5% decline the previous month.
The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was steady at 97.78, after falling to lows of 97.23 earlier Tuesday.
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