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Rising gasoline, rents push U.S. inflation higher in September

U.S. consumer prices recorded their biggest gain in five months in September as the cost of gasoline and rents surged, pointing to a steady pickup of inflation that could keep the Federal Reserve on track to raise interest rates in December.

The Labor Department said on Tuesday its Consumer Price Index increased 0.3 percent last month after rising 0.2 percent in August. In the 12 months through September, the CPI accelerated 1.5 percent, the biggest year-on-year increase since October 2014. The CPI rose 1.1 percent in the year to August.

The so-called core CPI, which strips out food and energy costs, gained 0.1 percent last month after climbing 0.3 percent in August. That slowed the year-on-year increase in the core CPI to 2.2 percent following a 2.3 percent rise in August.

Dollar steady as Fed policy in focus

The U.S. dollar was mildly weaker on Tuesday for the second straight day as investors took some profits from the greenback's recent strength and evaluated whether the Federal Reserve would to raise interest rates this year.

The greenback had rallied around 3 percent since the end of September, mirroring a climb in benchmark U.S. Treasury US10YT=RR yields to a four-month high above 1.8 percent on expectations that the Fed would raise rates by December.

The dollar index, which tracks the greenback against a basket of six major currencies .DXY, was last unchanged on the day at 97.890.

Oil rises on reported US crude inventory draw, expected OPEC cut

Oil prices rose over 1 percent on Wednesday, lifted by a report of falling U.S. crude inventories and an OPEC statement saying a planned production cut was achievable, but analysts warned that Chinese economic data could erode bullish momentum.

A slightly weaker dollar also supported oil, traders said, as it makes fuel purchases cheaper for countries using other currencies at home, potentially spurring demand.

U.S. West Texas Intermediate (WTI) crude oil futures were trading at $50.89 per barrel at 0118 GMT (9:18 p.m. EDT) , up 60 cents, or 1.19 percent, from their last settlement.