TOKYO, April 10 Reuters The dollar consolidated on Wednesday ahead of a key inflation report later in the day, while the yen remained a whisker away from what markets believe to be the line in the sand for Japanese authorities to intervene.

The kiwi, meanwhile, briefly jumped to a threeweek high after the Reserve Bank of New Zealand kept rates on hold, as expected, but warned of persistent inflation.

The main market focus on Wednesday is U.S. consumer price inflation for March, which traders have been eagerly awaiting for hints on the Fed39;s policy outlook.

The inflation data follows a strong jobs report last Friday that blew past forecasts, raising questions on how soon and how much the central bank will cut rates this year.

Futures traders reduced bets to the lowest level since October, around 60 basis points in rate cuts this year, LSEG data showed on Monday, amid evidence of continued strength in the U.S. economy.

Ahead of the data, U.S. interest rate futures set the odds of the first cut occurring in June at about 60, up from 51 on Monday, according to CME Group39;s FedWatch tool, although the possibility of a hold has bumped up to 40.

A solid inflation number could lead markets to price out a June cut, which could propel the dollar sharply higher, said Carol Kong, a currency strategist at Commonwealth Bank of Australia.

A strong core CPI of 0.3 monthtomonth or above will likely break the case for a June rate cut because there are two more CPI readings ahead…