The US Department of Labor said today that the consumer price index rose by 0.3 percent last month, the smallest rise since August, compared to a 1.2 percent rise on a monthly basis in the consumer price index in March, which constituted the largest jump since September 2005.
On an annual basis, the consumer price index rose by 8.3 percent, compared to expectations of 8.1 percent, but less than 8.5 percent in the previous month.
The data indicated that inflation may have peaked, but is unlikely to ease quickly, prompting the Federal Reserve to change its current plans to tighten policy.
The dollar index, which measures its value against six currencies, fell to 103.37 before the data was released, but it jumped immediately after its publication to hit its highest level in the session 104.13, close to a 20-year high of 104.19 on Monday.
However, trading witnessed volatility after the release of the data, as the US currency fell from its high levels and was traded in the latest trading, down 0.029 percent to 103.890. The euro fell 0.07 percent to 1.052 dollars.
The dollar has appreciated more than 8 percent this year as the US central bank tightens its monetary policy. The bank raised overnight funds rate by 50 basis points last week, the highest increase in 22 years.
Markets absorbed another expected rise of at least 50 basis points in June, according to the Federal Reserve’s Open Market Committee.
The euro rose after the European Central Bank reiterated expectations that it would raise its benchmark interest rate in July for the first time in more than a decade to fight record inflation, with some policymakers on Wednesday hinting at more hikes ahead.
The yen rose 0.48 percent to 129.79 yen to the dollar, while the pound sterling was traded in the latest trading, down 0.52 to 1.2258 dollars.
The price of the cryptocurrency bitcoin fell 3.88 percent to $29797.31 after falling below 30,000 on Tuesday for the first time since July of last year.