The U.S. dollar index fell 0.1% to 103.73, after touching a six-week high of 104.11 the previous day. Expectations for U.S. monetary policy have shifted dramatically even since the start of the month. On Feb. 1, markets were priced for a peak of 4.83% by July, with a drop to 4.5% by the year-end. Evidence of economic strength undermined the dollar on Thursday, but it gave equities and commodities a lift. "If we take a step back, the better-than-expected U.S. data should support the global growth picture. In addition, China's reopening story has yet to fully play out and if data in the coming weeks starts to show a pick-up in activity, then this should bode well for global growth," said Christopher Wong, a currency strategist at OCBC. With the dollar on the back foot, the euro rose 0.2% to $1.07095, having hit six-week lows earlier in the week. That said, it is still more than 11% above late September's 20-year low. Sterling rose 0.1% to $1.20465, after having lost more than 1% on Wednesday. British inflation slowed more than expected in January and there were signs that price pressures are cooling in parts of the economy, such as services, that the Bank of England (BoE) watches closely. The BoE has already indicated that it may stop raising rates in March and Wednesday's inflation data reinforced that view.
Meanwhile, the yen gained broadly, pushing the dollar down by 0.2% to 133.91, and the euro down 0.1% to 143.3. Yen traders are waiting for a speech by Kazuo Ueda, the nominee to become the Bank of Japan's next governor, at a confirmation hearing at the lower house of parliament on Feb. 24. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates Euro ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Rae Wee in Singapore; Editing by Simon Cameron-Moore and Mark Potter)
