Forex Today: US Dollar struggles to find demand as focus shifts to inflation data

Here is what you need to know on Thursday, January 11:

The US Dollar (USD) stays on the back foot early Thursday, with the USD Index retreating toward 102.00 after closing in negative territory on Wednesday. Weekly Initial Jobless Claims data and Consumer Price Index (CPI) figures for December will be featured in the US economic docket later in the day.

US Inflation Preview: Stocks set to surge if reality fails to meet high Core CPI expectations.

In the absence of high-tier macroeconomic data releases, improving risk mood made it difficult for the USD to stay resilient against its rivals during the American trading hours on Wednesday. US stock index futures were last seen rising between 0.2% and 0.4%, suggesting that the sentiment remains upbeat. Meanwhile, the high-yield at the 10-year US Treasury note auction came in at 4.02%, down from 4.29% in December and put additional weight on the currency. 

CPI inflation in the US is forecast to tick up to 3.2% on a yearly basis from 3.1% in November. The Core CPI, which excludes volatile food and energy prices, is expected to rise 0.3% on a monthly basis.

US CPI Data Preview: Declining core inflation could reinforce expectations of Fed rate cuts.

Earlier in the day, the data from Australia showed that Imports declined by 7.9% on a monthly basis in December, while Exports increased by 1.7%. After posting small gains on Wednesday, AUD/USD continued to edge higher in the Asian trading hours and the pair was last seen trading in positive territory above 0.6700.

EUR/USD gained traction in the second half of the day on Wednesday and closed above 1.0950. The pair was last seen inching higher toward 1.1000. 

GBP/USD reclaimed 1.2700 during the American session on Wednesday and extended its rebound in the Asian trading hours on Thursday. The pair was last seen trading at its highest level in nearly two weeks at around 1.2770.

Despite the renewed USD weakness, USD/JPY rose toward 146.00 and posted strong gains on Wednesday. The pair staged a technical correction early Thursday and was last seen trading in negative territory below 145.50.

Gold closed marginally lower on Wednesday as the benchmark 10-year US Treasury bond yield managed to stabilize near 4%. XAU/USD clings to modest recovery gains slightly above $2,030.

(This story was corrected at 07:28 GMT to say CPI inflation in the US is forecast to tick up to 3.2% on a yearly basis from 3.1% in November, not 2.1%.)