TOKYO, June 14 Reuters The dollar hovered near a threeweek low to the euro and a onemonth low versus sterling on Wednesday, after unexpectedly soft U.S. inflation data cemented the view that the Federal Reserve will skip an interest rate hike later in the day.

China39;s yuan, however, sagged to a 612month trough, a day after the central bank cut rates, amid speculation even more stimulus is on the way to support the sputtering postCOVID economic recovery.

The dollar index which measures the currency against six major peers, including the euro and sterling was flat at 103.30 in Asian trading, after dipping to the lowest since May 22 overnight at 103.04.

The U.S. consumer price index CPI edged up just 0.1 last month, and notched its smallest yearonyear increase since March 2021 at 4.0.

That saw bets for a quarterpoint hike to U.S. rates later on Wednesday pared to less than 6 currently, from 21 24 hours earlier, according to the CME Group39;s FedWatch Tool.

The soft inflation report effectively cements a Fed pause, although I doubt it will be enough to warrant a dovish undertone as it39;s not in their interest with CPI twice the Fed39;s target, said Matt Simpson, senior market analyst at City Index, who points to 103 as a key support level for the dollar index.

Whilst it was enough to send EURUSD above 1.0800, it wasn39;t enough to keep it there given a hawkish pause seems quite likely.

The euro was little changed at 1.07885, after reaching a high of 1.08235 on…