The dollar held near a seven-month peak against the euro today after US inflation data reinforced expectations that the Federal Reserve would continue to raise interest rates at a steady pace.
The euro was flat at around $1.2605 after falling 0.3 per cent yesterday. It was within striking distance of Monday's $1.2581, its lowest level since October 21st, according to electronic trading system EBS.
The dollar also struck a six-month high against the British pound and a one-month high against the yen, after a hotly awaited US Treasury report did not single out China as gaining an unjust trade advantage by keeping its currency artificially low.
"I think the relief that the Treasury report didn't name China has supported the dollar," said Mitsuru Sahara, forex manager at UFJ Bank.
Traders said the US currency also benefited from a flight to dollar deposits from riskier assets such as foreign stocks amid rumours of big hedge fund losses.
Earlier, sterling fetched around $1.8335 after falling as far as $1.8294, its lowest level since October 29th.
The pound has dived almost 5 per cent in the last month as a string of weak economic data led many traders to bet that the Bank of England's next move on interest rates would be down, not up as previously expected.