A sliding dollar was pushed lower still in Asia on Thursday, as traders took surprisingly slow U.S. inflation as a signal U.S. interest rate rises will be all but finished by month's end.

The dollar has been steadily slipping for about six weeks, but had its worst session in five months on Wednesday - falling more than 1% against the euro to its lowest in more than a year - as the U.S. inflation slowdown gave dollar sellers confidence.

The euro made a fresh 15-month high of $1.1148 in Asia on Thursday and the yen touched its strongest since mid-May at 138.08 per dollar. The U.S. dollar index fell marginally to 100.42, its lowest since April 2022.

U.S. core inflation came in at 0.2% in June against market expectations for 0.3%. Headline annual CPI fell to 3% and has been dropping since hitting a peak at 9.6% a year earlier.

Interest rate futures showed markets have fully priced a Federal Reserve rate hike later this month, but expectations of any further increases are being wound back.

The New Zealand dollar rose 0.5% to a two-month high of $0.6332 and the Aussie was up 0.4% to a three-week peak at $0.6813.

Moves in other currencies were smaller but still delivered new milestones as traders reckon the dollar has further to drop. The Swiss franc hit its strongest since 2015 at 0.8655 to the dollar and sterling a 15-month top of $1.3019.

Source: Reuters