TOKYO (Reuters) – The dollar eased back from a one-year high versus major peers on Wednesday ahead of U.S. consumer price data that could provide additional clues on when the Federal Reserve will taper stimulus and raise interest rates.

The dollar index, which measures the greenback against six rivals, slipped 0.18% to 94.358 from Tuesday, when it touched 94.563 for the first time since late September 2020.

The U.S. currency weakened 0.13% to 113.465 yen, down from a three-year high of 113.785 yen reached in the previous session.

The euro climbed 0.18% to $1.1551, off Tuesday’s $1.1522, its lowest in nearly 15 months.

“The CPI is going to be really important, so there may be a little bit of positioning ahead of that,” said Joseph Capurso, a strategist at Commonwealth Bank of Australia in Sydney.

“The risk is for inflation to stay high, and that would bring forward market expectations for the timing and pace of rate hikes, and that will support the U.S. dollar. It’s off a little bit today but I think the dollar has more upside.”

The dollar gained on Tuesday amid rising expectations the Fed will announce a tapering of stimulus next month, with interest rate hikes following next year.

Money markets priced about a 50-50 chance of a rate increase by July, after three Fed policymakers said overnight that the U.S. economy has healed enough to begin to scale back the central bank’s asset-purchase programme, including Vice Chair Richard Clarida.

Meanwhile, a surge in energy prices has fuelled inflation concerns and stoked bets that the Fed may need to move faster to normalise policy than officials had projected.

“CPI is the main economic draw” on Wednesday, and “has the potential to see Fed rate hike expectations move again, one way or another,” said Ray Attrill, head of foreign exchange strategy at National Australia Bank in Sydney.

Most Fed policymakers continue to say inflationary pressures will prove transitory.

Governors Lael Brainard and Michelle Bowman are among the Fed officials due to speak later Wednesday, when the minutes of the central bank’s September meeting are also due to be released.

Sterling strengthened 0.19% to $1.36135, but remained around the middle of this month’s range.

The Aussie dollar slipped 0.19% to $0.73375, retreating from Tuesday’s one-month high at $0.7384.

Bitcoin traded around $56,200, after reaching a five-month high of $57,855.79 at the start of the week.

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