The Labor Department released the inflation report for December, which showed prices were up 2.9% from a year ago, in line with economists expectations and up from 2.7% in November.

The consumer price index increased by 2.9 percent in December from a year earlier, the Labor Department reported Wednesday, in line with economists’ expectations and hotter than a 2.7 percent rise in November. It was also above a 2.6 percent annual increase in October.

Fresh inflation data released Wednesday is likely to keep the Federal Reserve on pause during its next policy meeting this month, even though a new reading did show some signs of easing.

The dollar's towering rally hit a speed bump on Wednesday as traders turned cautious ahead of a closely watched U.S. consumer inflation report due later in the day, making them hesitant to take on new positions.