Dollar near the lowest level in a year and the euro hit a 17-month peak

The dollar index faltered near its lowest level in more than a year on Tuesday as investors await fresh catalysts to see if the dollar will continue to fall in the wake of last week’s softer-than-expected inflation report.

The dollar index, which measures the performance of the US currency against a basket of six major currencies, fell slightly to 99.84 in early Asian trading, after it plunged to its lowest level since April 2022 on Friday.

The index also recorded its worst weekly performance in 2023 last week after data showed a further decline in inflation in the United States, with consumer prices recording the lowest annual increase in more than two years, easing pressure on the Federal Reserve to resume raising interest rates.

“I think the dollar may remain under selling pressure,” said Carol Kong, currency strategist at Commonwealth Bank of Australia. “Markets are focused on the end of the Federal Open Market Committee’s monetary tightening cycle.”

The euro rose to a 17-month high against the US currency at $1.1256, while the pound sterling rose 0.15 percent to $1.3094, not far from last week’s high of $1.3144.

The Japanese yen rose to 138.66 against the dollar, still up 4 percent from last month’s seven-month low.

The Australian dollar rose 0.07 percent in the latest trading, recording $ 0.6821, while the New Zealand dollar rose 0.1 percent to $ 0.6332.

And the yen recorded a slight increase in foreign trade at 7.1749 against the dollar.