Dollar slides to one-year low as cooling inflation raises Fed pause expectation

The U.S. dollar tumbled to a one-year low against a basket of currencies on Friday while the euro hit a one-year peak, as traders ramped up expectations of an imminent end to the U.S. Federal Reserve’s rate-hike cycle on signs of cooling inflation.

Data from the U.S. Labor Department on Thursday showed the producer price index (PPI) fell by the most in nearly three years last month, coming a day after inflation data pointed to moderation in consumer prices.

The greenback took another leg down on Friday and the U.S dollar index, which measures the currency against six major peers, tumbled to a roughly one-year low of 100.78.

It was last 0.15% lower at 100.82, and was headed for a weekly decline of more than 1%, its steepest since January.

Meanwhile, the euro rose to a fresh one-year top of $1.1075, pushing past Thursday’s previous high.

“The easiest way to express a dollar negative view has been with the euro,” said Ray Attrill, head of FX strategy at National Australia Bank.

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