Investing.com - The dollar was little changed against the other major currencies on Tuesday, hovering close to a seven-month peak data showing that the cost of living in the U.S. rose at the fastest pace in five months in September.
EUR/USD slipped 0.17% to 1.0979, off highs of 1.1027 hit earlier in the day.
The U.S. Commerce Department said the consumer price index rose 0.3% in September, in line with expectations and after a 0.2% increase the previous month.
Year-on-year, consumer prices increased 1.5% last month, also in line with forecasts and after having risen 1.1% in August. That was its highest reading since October 2014.
Core CPI, which excludes food and energy costs, increased by 0.1% last month, below forecasts for a 0.2% rise.
The pickup in inflation indicated that the economy may be able to sustain higher interest rates.
GBP/USD jumped 0.97% to 1.2302 after the U.K. Office for National Statistics said consumer price inflation rose by an annualized rate of 1.0% last month, above forecasts for a 0.9% gain and compared to the 0.6% increase seen in August. That was its highest level since November 2014.
Month-over-month, consumer prices rose 0.2% in September, compared to expectations for a 0.1% advance.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose 1.5% last month above forecasts for a gain of 1.4% and compared to the 1.3% advance in August.
USD/JPY held steady 103.93, while USD/CHF added 0.11% to 0.9904.
The Australian and New Zealand dollars were stronger, with AUD/USD up 0.55% at 0.7672 and with NZD/USD advancing 0.98% to 0.7205.
Earlier Tuesday, Statistics New Zealand said consumer prices rose 0.2% in the third quarter, beating expectations for a flat reading and after an increase of 0.4% in the three months to June.
Meanwhile, the Aussie found support after Reserve Bank of Australia Governor Philip Lowe said he was comfortable with the current exchange rate.
In his first speech as the RBA governor, Philip Lowe also said that current low levels of inflation were not unprecedented, dampening expectations for further rate cuts.
Meanwhile, USD/CAD eased 0.08% to trade at 1.3116.
Also Tuesday, Statistics Canada reported that manufacturing sales increased by 0.9% in August, beating expectations for a 0.2% rise, after an uptick of 0.1% the previous month.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.14% at 97.85, not far from Monday’s seven-month high of 98.15.