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U.S. Dollar Pulls Back Off Best Levels But Remains Slightly Higher

The value of the U.S. dollar has pulled back well off its best levels of the day but currently continues to see modest strength during trading on Tuesday.

The U.S. dollar index is currently trading at 92.64, up 0.1 percent, after reaching an intraday high of 92.89 in morning trading.

The greenback is trading at 110.01 yen versus the 109.94 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1810 compared to last Friday's $1.1814.

The dollar pulled back off its best levels as traders look ahead to the release of the Labor Department's report on consumer price inflation in the month of August on Tuesday.

Economists currently expect consumer prices to rise by 0.4 percent in August after climbing by 0.5 percent in July.

Core prices, which exclude food and energy prices, are also expected to edge up by 0.3 percent, matching the uptick seen in the previous month.

Last Friday, the Labor Department said its producer price index for final demand climbed by 0.7 percent in August after jumping by 1.0 percent for two straight months. Economists had expected producer prices to increase by 0.6 percent.

Excluding prices for food, energy and trade services, core producer prices rose by 0.3 percent in August following a 0.9 percent advance in July. Core prices were expected to rise by 0.4 percent.

Reports on industrial production, retail sales, import and export prices and consumer sentiment may also attract attention in the coming days.

Meanwhile, traders are also looking ahead to next week's Federal Reserve meeting, with the central bank potentially providing an update on the outlook for its asset purchase program.

The Fed's two-day monetary policy meeting is scheduled for next Tuesday and Wednesday, but recent signs of slowing economic momentum could lead the central bank to hold off on discussing tapering.

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