Dollar steadies before Trump inauguration
Traders eyeing Bessent nomination hearing
Yen firms vs dollar and euro on possible BOJ rate hikes

Jan 16 Reuters The U.S. dollar steadied on Thursday despite the sharp fall in U.S. bond yields after Wednesdays inflation data as market focus shifted to Donald Trumps presidential inauguration and possible inflationary impact of his policies.

Meanwhile the yen rose against the dollar and the euro as investors expected the Bank of Japan to hike rates next week.

Core U.S. inflation dipped to 0.2 monthonmonth in December from 0.3 in November, as expected, while the annualised 4.2 reading came below the 3.3 forecast.

Traders who have been growing more worried about inflation responded with relief, buying stocks and sending benchmark 10year Treasury yields down more than 13 basis points.

The currency reaction was more muted.

The U.S. dollar index was up 0.05 at 109.09.

The highlight of the day should be the nomination hearing of the future Treasury minister Scott Bessent in front of the Senate Finance Committee.

Bessent is expected to keep a leash on U.S. deficits and to use tariffs as a negotiating tool, mitigating the expected inflationary impact of economic policies expected from the Trump administration.

There was little direct reaction in foreign exchange markets to the ceasefire deal in Gaza, though the Israeli shekel did touch a onemonth high on Wednesday.

Analysts flagged that the U.S. consumer price data was better…