LONDON, May 14 Reuters The dollar edged higher on Tuesday as traders awaited U.S. inflation data, while the yen hovered near a twoweek low, stoking intervention worries.

The sterling fell sharply after Bank of England Chief Economist Huw Pill said it was not unreasonable to believe that over summer there might be enough confidence to consider rate cuts.

Traders are awaiting the U.S. consumer price index CPI, scheduled for Wednesday, to gauge what path the Federal Reserve will take this year in the wake of recent softerthanexpected U.S. labour market data and comments from officials that indicated the central bank was unlikely to raise rates further.

Money markets have dialled back their expectations of Fed rate cuts this year due to sticky inflation and are now pricing in about 40 basis points of easing this year, compared with 150 bps of cuts anticipated at the start of 2024. They are also pricing in a first rate cut, with a 50 chance, only in September, according to the CME FedWatch tool.

Nearly twothirds of economists polled by Reuters expect the Fed to cut its key interest rate twice this year, starting in September. That39;s up from a just over half of economists in the previous survey.

U.S. inflation this week is expected to show that core consumer prices rose 0.3 monthonmonth in April, down from a 0.4 growth the prior month, according to a Reuters poll.

But before that, U.S. Producer Price Index PPI data is due to be released later on Tuesday, which analysts…