The US dollar continued to weaken on Wednesday, pulling back from its highest level in two weeks as softer-than-expected inflation data reduced expectations of further interest rate increases.
The US Dollar Index fell to 100.81 points, reflecting a decline in the currency’s strength against a basket of major currencies.
Against the Japanese yen, the dollar slipped 0.1% to 162.08 yen. Meanwhile, both the euro and the British pound gained 0.1%, trading at $1.1433 and $1.3401, respectively.
The move followed the release of US inflation data showing consumer prices rose 3.5% year-on-year, a figure that eased concerns about additional interest rate hikes by the Federal Reserve.
Despite rising oil prices caused by military tensions in the Strait of Hormuz and renewed restrictions affecting Iran, investors focused on the inflation report, which suggested that price pressures may not be strong enough to justify tighter monetary policy in the near term.
As a result, the dollar came under pressure while other major currencies posted modest gains.
