The dollar tumbled to its lowest since last April on Thursday, heading for its biggest weekly slide so far this year, as traders took a surprisingly cool read of US inflation as a sign US rates could peak as early as this month, Reuters reported.
US data on Wednesday showed inflation slowed a lot faster than expected last month.
That gave rise to the biggest one-day dollar sell-off in five months and left the greenback at its lowest in over a year against the euro and sterling, and at its lowest in over eight years against the Swiss franc.
US core inflation came in at 0.2 per cent in June against market expectations for 0.3 per cent, while headline annual CPI fell to 3 per cent. Interest rate futures showed markets have fully priced in another rate hike from the Federal Open Market Committee later this month, but expectations of any further increases have evaporated.
Whether or not the dollar is on a one-way trip lower over the rest of the year remains to be seen, according to City Index markets strategist Fiona Cincotta.