The dollar held close to a six-week peak against a basket of currencies in Asian trade on Wednesday, as the euro edged down to touch a fresh 2014 low on the diverging interest rate outlook for the US and euro zone.
The dollar index, which tracks the greenback against a basket of six major rivals, was steady on the day at 80.773, not far from a Tuesday high of 80.837 touched on expectations that higher US interest rates are on the horizon.
Data issued on Tuesday showed US inflation was 0.3 per cent in June, in line with most analysts' forecasts, though core inflation, excluding volatile food and energy prices, was just 0.1 per cent, about half of what analysts had forecast.
Despite the weaker-than-expected core inflation reading, market expectations that the US Federal Reserve is on track to continue tapering its bond purchase programme and then raise interest rates in the latter half of 2015 remained intact.
The dollar index, which tracks the greenback against a basket of six major rivals, was steady on the day at 80.773, not far from a Tuesday high of 80.837 touched on expectations that higher US interest rates are on the horizon.
Data issued on Tuesday showed US inflation was 0.3 per cent in June, in line with most analysts' forecasts, though core inflation, excluding volatile food and energy prices, was just 0.1 per cent, about half of what analysts had forecast.
Despite the weaker-than-expected core inflation reading, market expectations that the US Federal Reserve is on track to continue tapering its bond purchase programme and then raise interest rates in the latter half of 2015 remained intact.
The euro languished at multi-month lows against many of its peers, having moved decisively lower in the previous session with an eye-catching fall in the Swiss franc. The weaker euro dovetailed with expectations for the European Central Bank to ease policy further.
The common currency was treading water at $1.3465 after touching a fresh eight-month low against of $1.3458 earlier, while it also slipped about 0.4 per cent against the Australian dollar to A$1.4271.
The common currency was treading water at $1.3465 after touching a fresh eight-month low against of $1.3458 earlier, while it also slipped about 0.4 per cent against the Australian dollar to A$1.4271.
The European Union threatened Russia on Tuesday with harsher sanctions over Ukraine, while fighting around Gaza continued.
The high-flying pound edged up about 0.1 per cent to $1.7073 , aiming back towards a six-year top of $1.7192 set last week.
The Australian dollar added about 0.4 per cent to buy $0.9432 , after spiking to a nearly two-week high of $0.9439 on surprisingly high core inflation figures.
The high-flying pound edged up about 0.1 per cent to $1.7073 , aiming back towards a six-year top of $1.7192 set last week.
The Australian dollar added about 0.4 per cent to buy $0.9432 , after spiking to a nearly two-week high of $0.9439 on surprisingly high core inflation figures.
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