Dollar falls after US inflation data

The dollar fell on Tuesday after data showed that consumer price inflation in the United States rose less than expected last month, which reinforced expectations that the Federal Reserve (the US central bank) will reduce the pace of interest rate hikes at the end of its two-day meeting that ends on Wednesday.

The dollar fell to a six-month low against the euro after the data was published. The euro reached 1.0673 dollars, its highest level since June, and in the latest transactions recorded an increase of 0.9 percent to 1.0631 dollars.

The dollar fell against the yen to a one-week low of 134.67, and in the latest transactions it was recorded at 135.55 yen, down 1.5 percent.

The dollar index, which measures the currency against six major currencies, fell 0.9 percent to 104.02.

Data show consumer price inflation fell in November on an annualized basis after the cost of gasoline and used cars fell, bringing annual inflation to the lowest level in almost a year. In the twelve months to November, the Consumer Price Index rose 7.1 percent, the smallest increase since December 2021, after rising 7.7 percent in October.

Excluding volatile food and energy components, the Consumer Price Index rose 0.2 percent last month after rising 0.3 percent in October. On an annual basis, core inflation in November increased by six percent after rising 6.3 percent in October.