Investing.com - The dollar continued to hover at seven-month highs against the other major currencies on Tuesday, after upbeat U.S. inflation data added to hopes that the Federal Reserve will raise interest rates at its meeting next month.
USD/JPY edged up 0.12% to one-week highs of 123.32.
The U.S. Commerce Department reported that consumer prices increased by 0.2% last month, matching forecasts and following a fall of 0.2% in September.
Year-over-year, consumer prices were 0.2% higher from the same month a year earlier, compared to expectations for a 0.1% increase.
Core consumer prices, which exclude food and energy costs, increased by 0.2%, meeting expectations.
The upbeat data added to expectations that the Fed will hike interest rates as soon as next month.
EUR/USD slipped 0.19% to fresh six-month lows of 1.0666.
Markets shrugged off a report by the ZEW Centre for Economic Research showing that its index of German economic sentiment rose by 8.5 points to 10.4 this month from October’s reading of 1.9, which was a 12-month low.
Analysts had expected the index to rise by 4.1 points to 6.0 in November.
However, the index of euro zone economic sentiment declined to a 12-month low of 28.3 in November from 30.1 a month earlier, missing forecasts for 35.2.
Elsewhere, the dollar was steady against the pound, with GBP/USD at 1.5203 and was higher against the Swiss franc, with USD/CHF rising 0.38% to 1.0135.
Sterling found support after the U.K. Office for National Statistics said the annual rate of inflation fell 0.1% last month, in line with forecasts, after a 0.1% fall in September.
It was the first time annual inflation has fallen for two consecutive months since the series was created in 1996.
The consumer price index ticked up 0.1% from a month earlier, matching forecasts. However, underlying inflation, which strips out food, energy, alcohol and tobacco costs rose 1.1% last month, above forecasts for a reading of 1.0%.
The data also showed that the house price index rose 6.1% in September, above forecasts for a gain of 5.4% and following a 5.5% increase in August.
The Australian was higher, with AUD/USD gaining 0.42% at 0.7127, while NZD/USD slid 0.27% to 0.6476.
Meanwhile, USD/CAD edged down 0.18% to trade at 1.3308, after rising to one-month highs of 1.3371 on Monday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.14% at a fresh seven-month peak of 99.60.