The dollar hovered slightly below this year's peak on Tuesday, while cryptocurrencies hit records, as inflation figures loom as the next test of traders' thinking about the interest rate outlook.

Economists expect the figures to point to heavy pressure on factory gate prices in China, which could flow through global supply chains, and soaring US consumer prices going forward.

Inflation expectations have pulled US real yields and the dollar slightly lower overnight, especially against the New Zealand dollar, but remain within reach of the highs reached on Friday.

The greenback is steady just above 113 yen. It was but down around 0.7% against the kiwi nightlong as traders remained cautious of the chance that the Federal Reserve Bank of latest island might raise interest rates by fifty basis points (bps) later this month.

The risk-sensitive Australian dollar additionally strong nightlong and control most of its modest gains to trade at $0.7410 on Tues. The US dollar index was steady at 94.095, around the middle of the range it continued through October.

Bitcoin, which is sometimes seen as an inflation hedge and has surged amid waves of positive news, rose to a record $67,700 in Asian trade, pulling ether to a record $4,800.

Steps Taken by the Fed

Sterling, hit last week when the BoE surprised markets by holding interest rates steady, had made something of recovery on Monday as world bond markets eased some aggressive bets on higher interest rates in the near term.

Ahead of the data, some central bankers will speak on Tuesday, including European Central Bank President Christine Lagarde at 1300 GMT and Fed chair Jerome Powell at 1400 GMT.

Last week, along with the surprise Bank of England, the Reserve Bank of Australia, and the Federal Reserve pushed back on the market's aggressive upside projections and some of the lead has disengaged from interest rate prices.

Fed funds futures have pushed back rate hikes from around July next year to Sept or Oct. Analysts at commonplace leased additionally expect gains within the third quarter of next year, however a slow path higher afterward.

The dollar slouching on Mon once touching a 15-month high on Fri following robust America jobs information whereas investors digestible the report, wanting ahead to inflation information and observance comments from Federal Reserve officers for rate policy clues.

On Wednesday the Fed stuck to its view that the current high inflation is expected to be temporary and said it would start cutting its massive bond-buying program this month but wait for more job growth before raising interest rates.

Fed's Shift of Policy Focus

Later, Friday, US data showed jobs increased more than expected in October as the headwinds from the spike in COVID-19 infections over the summer eased, suggesting economic activity is regaining momentum early in the fourth quarter.

Fed officials shifted their focus towards interest rate policy with Fed Vice Chairman Richard Clarida saying the conditions for a rate hike could be met next year with job growth expected to continue.

In separate remarks, the President of the Federal Reserve Bank St. Louis James Bullard reiterated his view that the Fed needs to raise rates twice next year.

Commodity Futures Trading Commission data showed speculators reduced their net long positions on the dollar for the fourth straight week in the week to November 2.

Eurozone inflation will ease next year and remain too weak in the medium term, European Central Bank chief economist Philip Lane told Spanish newspapers, reiterating the bank's old message that high price growth is temporary.

In cryptocurrencies, Bitcoin was up 4% at around $65,936.62 – not far from a recent record high – while ether was up 3% at $3,093.48 after hitting a record high of $4,768.07 earlier.