The king of the currency re -depreciated as market expectations for the Federal Reserve (Fed) to cut stimulus eased after a disappointing reading of US inflation data.
Entering the European session, the dollar index traded down 0.2% at 92.45 against most major currencies.
Inflation readings in August were below expectations with the consumer price index excluding food and energy prices rising only 0.1% indicating that the upward pressure on inflation began to ease.
Earlier, some Fed policymakers had hinted that the U.S. central bank would reduce bond purchases by the end of the year.
The Wall Street Journal also reported last Friday that policymakers will seek a deal to begin cuts in November.
Still, weaker -than -expected NFP jobs reports and easing of inflationary pressures have raised market doubts ahead of the Fed’s policy meeting next week.
In contrast to the US, UK inflation soared at 3.2% far above the Bank of England (BOE) target, causing markets to begin to expect the central bank to raise interest rates faster.
Meanwhile, the euro traded steady by continuing to hover around the price of 1.1800, following the decline recorded by the US dollar during the European session.
The loonie dollar has changed little as the market's focus now shifts to Canadian inflation data to be published tonight.
