Dollar Retreats on Softer Inflation Data, Euro Rises
The US dollar retreated against major currencies on Wednesday following softer-than-expected inflation data from the Commerce Department. The Personal Consumption Expenditures Price Index, the Federal Reserve's preferred inflation gauge, rose 0.3% last month, below economists' forecast of a 0.4% increase.
The dollar had been strengthening in tandem with rising US Treasury yields on expectations of more Fed rate hikes amid inflation driven by higher oil prices. However, the data reduced market bets on an interest rate hike from the Federal Reserve, causing US Treasury yields to fall across the board.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.23% to 101.17. The euro rose 0.19% to $1.1361, while the dollar weakened against the yen and Swiss franc.