U.S. Dollar Resilient Amid Fed Independence Debate and CPI Insights

The U.S. dollar rebounded to a near one-month high following U.S. CPI data. Despite political pressures, the Federal Reserve is expected to maintain current interest rates. Analysts emphasize the importance of Fed independence for economic stability, while market volatility remains limited ahead of a Supreme Court tariff ruling.

The U.S. dollar made a notable recovery, nearing a one-month high in early Asian trade after the latest U.S. Consumer Price Index (CPI) data met forecasts. This reinforcement of the greenback comes amid an environment of intense pressure from the White House for the Federal Reserve to reduce interest rates, a move it seems poised to resist.

The dollar index, which evaluates the currency against six peers, climbed 0.3% to 99.18. This followed a decline earlier in the week driven by President Trump's threats of a criminal indictment against Fed Chair Jerome Powell. The Federal Reserve's independence has garnered staunch support from global central banks and major Wall Street leaders.

U.S. consumer prices showing a 0.3% rise in December set the stage for the Federal Reserve to maintain interest rates. Analysts argue that any indirect attempts to compromise the Fed's independence are unlikely to disrupt financial markets, provided inflation is contained. Observers await the legality outcome of Trump's tariffs in an upcoming Supreme Court decision.