Dollar index on course for fifth weekly losses
Euro touches twomonth high

LONDONSINGAPORE, April 13 Reuters The dollar fell to a twomonth low on Thursday after data showed U.S. inflation slowed sharply in March, bolstering hopes that the Federal Reserve39;s ratehiking campaign is either already finished or will be by May.

Figures released on Wednesday showed that consumer price index CPI inflation came it at 5 yearonyear in March, down from 6 in February.

Yet core inflation which strips out volatile food and energy prices picked up to 5.6, from 5.5 the previous month.

The dollar dropped after the data was released and weakened further on Thursday, helping the euro rise 0.27 to a twomonth high of 1.102.

The dollar index , which measures the greenback against six major peer, was last down 0.2 at 101.28, its lowest since the start of February. It was on track for its fifth straight weekly drop.

John Hardy, head of FX strategy at Saxo Bank, said the inflation data left the market with not much to go on. He said he expects the dollar to grind lower from here as inflation cools and the economy slows.

It encourages dollar weakness, as long as we don39;t get a major recession or a major reheating, Hardy said. Nothing massive, we39;re just looking for an extension of the weakness.

AGGRESSIVE HIKES

The dollar index has dropped almost 12 since touching a 20year high of 114.78 last year, after being driven up by the Federal Reserve39;s aggressive interest rate hikes,…