US Dollar Slips on Soft Inflation Data, Euro Back Above 1.14

The dollar gave up early gains after a weaker-than-expected US inflation reading redirected attention from Middle East tensions. The euro climbed to 1.142958, sterling reached 1.344203.

Oil prices had risen earlier on supply disruption fears, lifting the dollar as a safe haven. The inflation report reversed that move. Core price pressures eased more than forecast. Traders shifted focus from the oil spike to the disinflation trend and sold dollars.

EUR/USD traded above 1.14 for the first time in two weeks. Sterling extended its recovery from the 1.33 area. The data lowers the odds of further Fed tightening, narrowing the dollar's rate advantage against the euro and the pound.

The next US data point is the weekly jobless claims release Wednesday. The producer price index follows Thursday.