Forex Today: Dollar continues to weaken ahead of key inflation data

Here is what you need to know on Tuesday, September 13:

The greenback is having a difficult time staging a rebound on Tuesday with the US Dollar Index trading in negative territory near 108.00 in the early European session. The US Bureau of Labor Statistics will release the August Consumer Price Index (CPI) data later in the session as markets nearly fully price in another 75 basis points (bps) Fed rate hike in September. The European economic docket will feature the ZEW sentiment survey for the euro area and Germany. 

US CPI Preview: Dollar set to climb on low core expectations, three scenarios.

The positive shift witnessed in risk sentiment didn't allow the dollar to stay resilient against its rivals. Markets are turning optimistic that inflation in the US may have peaked and the latest headlines surrounding the Russia-Ukraine war point to Ukraine finding success in its counter-offensive. US Secretary of State Antony Blinken said late Monday that Ukrainian forces have made "significant progress" and argued that Russia could and should stop the war given the price they are paying. US stock index futures are up between 0.4% and 0.5%, suggesting Wall Street's main indexes could continue to push higher after having gained more than 1% on Monday.

EUR/USD registered its highest daily close in three weeks above 1.0100 on Monday and continued to edge higher early Tuesday. The pair was last seen trading in positive territory near 1.0150. Hawkish comments from European Central Bank officials help the shared currency hold its ground. 

GBP/USD closed the second straight trading day in positive territory and advanced beyond 1.1700 on Tuesday. The British pound benefits from risk flows and the UK's FTSE 100 Index is up modestly after the opening bell.

Despite the broad-based dollar weakness, USD/JPY struggled to find direction as the JPY failed to attract investors in the risk-positive market environment. The pair stays on the backfoot early Tuesday and was last seen losing 0.3% on the day at 142.25.

Gold reached a fresh September high at $1,735 on Monday but struggled to gather further bullish momentum with the benchmark 10-year US Treasury bond yield staying relatively steady at around 3.3%. XAU/USD trades flat above $1,720 so far on Tuesday.

Bitcoin reclaimed $22,000 on Monday before going into a consolidation phase on Tuesday. Ethereum lost nearly 3% on Monday and trades relatively quiet near $1,700. 

Ethereum holders watchout for proof-of-work fork post Merge.