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The dollar retreated from its highest level in 16 months on Thursday and lost some of its gains against the euro and the Australian and New Zealand dollars, as investors assessed the latest rally in the US currency and whether it is starting to decline.
The dollar rose in the past weeks as traders bet on tighter US monetary policy. Stronger-than-expected US inflation data last month and mixed retail sales data this week reinforced these bets.
The dollar index, which measures the performance of the US currency against a basket of six competing currencies, recorded its highest level since mid-July 2020 on Wednesday at 96.226. It was last at 95,694, down 0.1 percent on the day.
The euro, which was hovering near a 16-month low, rose 0.1 percent to $1.1334.
The New Zealand dollar rose 0.6 percent to $0.7041 after a survey conducted by the central bank revealed that near-term inflation is expected to increase in the fourth quarter of the year.
Yesterday, sterling rose 0.5% to a one-week high against the dollar after inflation rose in Britain in October, which puts pressure on the Bank of England to raise interest rates at its meeting next month.
Sterling last traded at $1,3503, up slightly on the day.
The Canadian dollar fell to its lowest level in six weeks. Markets expect the Bank of Canada to raise interest rates early next year.
The Australian dollar fell to its lowest level in six weeks at $ 0.7263, but later recovered, supported by the rise of the New Zealand dollar, and it rose in its last trading 0.3 percent to $ 0.7286.
