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Ahead of US inflation statistics, the dollar clings to a 20-year high.

Reuters reports from London. On Wednesday, the dollar remained at a two-decade high as investors awaited new inflation data from the United States to see how aggressively the Federal Reserve will have to tighten monetary policy to keep increasing prices in line.

The dollar index, which measures the strength of the greenback against a basket of six currencies, fell 0.28 percent to 103.65 in early European trade.

Despite estimates for U.S. inflation to have slowed to 8.1 percent yearly in April from 8.5 percent in March, the dollar remained within striking distance of 104.19, its highest level since December 2002, which was reached at the start of the week.

In a morning note, MUFG analyst Lee Hardman said, “Another weaker CPI reading will be necessary today to challenge the U.S. dollar’s current bullish trend, and even then, it is unlikely to be sufficient on its own to precipitate a prolonged reversal downward.”

The dollar has gained more than 8% this year as the Federal Reserve has been more hawkish, raising its benchmark overnight interest rate by 50 basis points this week, the highest increase in 22 years.

According to CME’s FedWatch Tool, markets are pricing in another raise of at least 50 basis points at the central bank’s June meeting.

The euro gained 0.24 percent to $1.05560 after trading basically flat since hitting a five-year low of $1.04695 at the end of last month.

As a result, recent suggestions by senior European Central Bank governors for a rate rise in July have had little impact on the euro’s value.

Meanwhile, after dropping to a more than two-decade low of 131.35 on Monday, the yen found some relief from the recent continuous climb in benchmark U.S. Treasury rates, trading up 0.36 percent at 129.975 per dollar.

On Wednesday morning, the benchmark 10-year note yield dropped from a more than three-year high to trade around 3%.

After hitting a 22-month low of $0.6911 earlier this week, the Australian dollar rose 0.51 percent to $0.6977.

After hitting a 22-month low of $1.2262 at the start of the week, sterling recovered 0.20 percent to $1.2341.

Bitcoin was down 1.70 percent at $30,474 after falling below $30,000 for the first time since July last year this week.

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