After seeing some strength in the early morning, the value of the U.S. dollar has moved to the downside during trading on Wednesday.
The U.S. dollar index has climbed well off its worst levels of the day but is currently down 0.16 points or 0.2 percent at 101.44.
The green back is trading at 134.34 yen compared to the 135.23 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0984 compared to yesterday's $1.0962.
The pullback by the dollar came following the release of the Labor Department's highly anticipated report on consumer price inflation in the month of April.
The Labor Department said its consumer price index climbed by 0.4 percent in April after inching up by 0.1 percent in March. Economists had expected consumer prices to rise by 0.4 percent.
Excluding food and energy prices, core consumer prices also rose by 0.4 percent in April, matching the increase seen in March as well as economist estimates.
The report also showed the annual rate of consumer price growth edged down to 4.9 percent in April from 5.0 percent in March. Economists had expected the year-over-year growth to be unchanged.
The annual rate of core consumer price growth also slipped to 5.5 percent in April from 5.6 percent in March. The modest slowdown matched economist estimates.
With the annual consumer price growth marking the smallest 12-month increase since April 2021, the data added to optimism about the Federal Reserve pausing its interest rate hikes.
CME Group's FedWatch Tool is currently indicating a 93.9 percent chance the Federal Reserve will leave interest rates unchanged at its next meeting in June.
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