The dollar wobbled near an over one-year low against its major peers on Tuesday, as investors awaited fresh catalysts to gauge if the greenback has further downside in the wake of last week’s cooler-than-expected U.S. inflation report.
The U.S. dollar index, which measures the greenback against a basket of six currencies, dipped slightly to 99.84 in early Asia trade, after having tumbled to its lowest since April 2022 on Friday.
The index also clocked its worst week of 2023 last week, after data showed U.S. inflation subsided further with consumer prices registering their smallest annual increase in more than two years, taking pressure off the Federal Reserve to continue raising interest rates.
“I think the dollar can stay under selling pressure,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia. “Markets are focused on the end of the FOMC tightening cycle.”
Against the greenback, the euro hit a fresh 17-month high of $1.1256, while sterling gained 0.15% to $1.3094, not far from last week’s top of $1.3144, also its highest since April 2022.
Money markets have largely priced in a 25-basis-point rate hike from the Fed at its policy meeting later this month, though see rates coming down as early as December.