The dollar was pinned near twoweek lows through a holidaythinned Asia session on Thursday, after soft U.S. inflation and another Federal Reserve promise to keep rates low reinforced expectations of meagre returns from the reserve currency.
The Australian dollar sat just below a twoweek top touched overnight, while the euro held at 1.2119, near its highest since Feb. 1.
Sterling, also boosted by receding expectations for negative interest rates in Britain, sat just shy of Wednesdays nearly threeyear peak of 1.3865.
Moves were slight and trade was lightened by Lunar New Year holidays in Japan and China. Against a basket of currencies the dollar sat at 90.387 after touching a twoweek trough of 90.249 in the wake of U.S. inflation figures.
U.S. core inflation last month was zero, data showed on Wednesday, against market expectations of 0.2.
In a speech, Fed Chair Jerome Powell focused on stillhigh unemployment and reiterated that the central banks new policy framework could accommodate annual inflation above 2 for some time before hiking rates.
In other words, easy policy is going to stay there for a long, long time, and that should be negative for the U.S. dollar, said Westpac currency analyst Imre Speizer.
I think itll be something that sits in the background, as just a reminder that the U.S. dollar cant go up while its got that easy policy relative to everybody else.
The dollar had pared some of its losses against other majors a little bit after a selloff in U.S….