LONDONTOKYO, May 31 Reuters The U.S. dollar rose strongly on Wednesday to a more than twomonth high after data showed European inflation is cooling quicker than expected and China39;s recovery is sputtering.

The euro fell to 1.066 earlier in the session, the lowest since March 20. It was last down 0.54 at 1.068.

That helped the dollar index , which measures the greenback against six major peers, climb to 104.63, its highest since March 16. It was last up 0.43 at 104.5.

Data on Wednesday showed inflation in France and some of Germany39;s biggest states is slowing quickly. Analysts said the figures reduced the pressure on the European Central Bank ECB to keep raising interest rates, diminishing the euro39;s attractiveness relative to the dollar.

In France, inflation cooled in May to its lowest level in a year as energy and food price increases moderated. Euro zonewide inflation data is due out tomorrow.

European inflation is rolling back now and you39;re taking back some of the previously anticipated hikes from the ECB, said Carl Hammer, chief strategist at European bank SEB.

Hammer also said the probable resolution of the U.S. debt ceiling standoff was supporting U.S. stocks and likely helping the dollar.

Weak economic data out of China also boosted the U.S. currency, analysts said. A survey released on Wednesday showed that China39;s factory activity shrank faster than expected in May, in the latest sign that the country39;s recovery from COVID19 lockdowns is…