Investing.com - The dollar was languishing at three-and-a-half week lows against the other major currencies on Wednesday as weak Chinese inflation data fueled expectations that the Federal Reserve will delay hiking rates for longer.
EUR/USD was up 0.36% to 1.1420, the most since September 18.
Data on Wednesday showed that the annual rate of inflation in China slowed to 1.6% in September, from 2.0% in August, compared to forecasts of 1.8%.
Producer prices were also lower, adding to concerns over deflationary pressures in the world’s second-largest economy.
The report came one day after data showing that Chinese imports tumbled 20% last month.
The soft data reinforced expectations that the Fed will wait for more time before tightening monetary policy amid fears that slowing global growth could affect the U.S. economy.
The dollar was at one week lows against the yen, with USD/JPY down 0.2% to 119.5, while USD/CHF slid 0.28% to 0.9550, the weakest since September 18.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.29% to three-and-a-half week lows of 94.52.
The dollar was also hit by dovish sounding comments by Fed officials.
Fed board Governor Daniel Tarullo said Tuesday that he doesn’t expect a rate hike this year, while St. Louis Fed President James Bullard said a rate hike this month is unlikely.
Meanwhile, the New Zealand dollar rebounded after comments by Reserve Bank Governor Graeme Wheeler earlier Wednesday, who highlighted concerns over the global economy but made no attempt to talk down the kiwi.
NZD/USD jumped 1.23% to 0.6724 from overnight lows of 0.6620. AUD/USD was up 0.19% to 0.7257.