Forex Today: Dollar consolidates CPI-inspired gains

Here is what you need to know on Wednesday, September 14:

Following Tuesday's impressive rally fueled by hot August inflation data from the US, the US Dollar Index consolidates its gains below 110.00 early Wednesday. The European economic docket will feature July Industrial Production data and the US Bureau of Labor Statistics will release the Producer Price Index (PPI) figures later in the day. During the Asian trading hours, the second-quarter Gross Domestic Product (GDP) reading from New Zealand and the August jobs report from Australia will be watched closely by market participants.

After the data from the US showed that the Core Consumer Price Index (CPI) climbed to 6.3% on a yearly basis in August from 5.9% in July, the dollar gathered strength amid renewed hawkish Fed bets. In turn, Wall Street's main indexes suffered heavy losses with the Nasdaq Composite erasing more than 5% on a daily basis. In the European morning, US stock index futures are up around 0.2%, pointing to a modest improvement in risk mood. Meanwhile, the CME Group FedWatch Tool shows that markets are pricing in a 34% probability of a 100 basis points Fed rate hike at its next policy meeting. 

US Inflation Analysis: Soaring Core CPI smashes Fed pivot narrative, King Dollar back on the throne.

EUR/USD lost more than 150 pips on Tuesday before going into a consolidation phase below parity early Wednesday.

GBP/USD is having a difficult time staging a rebound and trading in negative territory below 1.1500. The UK's Office for National Statistics reported on Wednesday that the annual CPI inflation in the UK declined to 9.9% in August from 10.% in July but the Core CPI edged higher to 9.3% from 9.2%.

USD/JPY came under strong bearish pressure and dropped below 144.00 during the Asian trading hours on Wednesday. Nikkei reported earlier in the day that the Bank of Japan conducted a foreign exchange "check" to see what market participants view the JPY's valuation. According to the news outlet, this is a sign that the BoJ could be making preparations for an intervention in the market. 

With the benchmark 10-year US Treasury bond yield gaining more than 2% and rising above 3.4% on Tuesday, gold suffered large losses and declined toward $1,700. XAU/USD was last seen moving sideways near that level amid a lack of action in US yields.

The intense flight to safety caused BTC/USD to lose nearly 10% on Tuesday but Bitcoin seems to have steadied slightly above $20,000 for the time being. Ethereum is already down nearly 12% this week following Tuesday's sharp decline. Nevertheless, ETH/USD seems to have found support near $1,500 and the pair was last seen gaining 2% on the day at $1,600.

Ethereum Price Prediction: Knife Catching 103 - Dalton's Third Rule.