The greenback weakened on Wednesday after a report showed that US inflation eased more than expected in April, reinforcing expectations that the Federal Reserve will keep its interest rate policy unchanged in June.
The annual inflation rate dropped to 4.9% in April, missing forecasts of 5% and marking the first time it has fallen below 5% since April 2021123.
Investors are now almost certain that the Fed will hold off on raising rates next month, with only a 5% chance of a hike priced in by money markets.
The dollar also faced headwinds from the ongoing stalemate over the US debt limit, after a meeting between President Joe Biden and congressional leaders on Tuesday failed to produce any breakthrough.