U.S. dollar gained strength on Wednesday as market participants digested a slew of key inflation data.

The Consumer Price Index (CPI) in the United States was flat in January due to lower energy prices, the U.S. Bureau of Labor Statistics said on Wednesday.

The CPI, a measurement of inflation, remained unchanged for a third straight month in January, after its reading spiked 0.3 percent in October.

Over the past 12 months, the CPI rose 1.6 percent, slowing down from December's 1.9 percent year-on-year increase, according to the report.

The so-called core CPI, which excludes energy and food costs, edged up 0.2 percent in January compared with the previous month. Over the year, the core CPI increased 2.2 percent, the report showed.

The data helped create an environment supportive of the U.S. Federal Reserve's current dovish stance, underpinning market sentiment, experts noted.

The dollar index, which measures the greenback against six major peers, rose 0.43 percent at 97.1309 in late trading.

In late New York trading, the euro decreased to 1.1269 dollars from 1.1331 dollars in the previous session, and the British pound was down to 1.2850 dollars from 1.2897 U.S. dollars in the previous session. The Australian dollar fell to 0.7094 dollar from 0.7098 dollar.

The U.S. dollar bought 110.99 Japanese yen, higher than 110.50 Japanese yen of the previous session. The U.S. dollar rose to 1.0088 Swiss francs from 1.0062 Swiss francs, and it was up to 1.3250 Canadian dollars from 1.3241 Canadian dollars.