Shafaq News / The dollar sank to its lowest since April 2022 on Thursday, as cooling U.S. inflation bolstered expectations the Federal Reserve would hike interest rates just one more time this year, eroding the greenback's yield advantage over its peers.

Against a basket of six currencies, the dollar index fell 0.8% to 99.738 , after dropping earlier to 99.767, a new 15-month trough. The dollar index was headed for its biggest weekly slide in 2023.

The euro rose 0.9% to $1.1220 , after hitting a new 16-month high earlier in the session. The euro headed for a sixth daily gain, its longest stretch of rises against the dollar this year.

Versus the Swiss franc, the dollar plunged to an eight-year low of 0.8583 francs . It last changed hands at 0.8588 francs, down nearly 1%.

U.S. data on Thursday reinforced the view that inflation is moderating. U.S. producer prices (PPI) inched up 0.1% in June, with the annual increase at 0.1% as well, the smallest year-on-year rise in nearly three years.

The PPI data followed Wednesday's consumer price index (CPI) report, which showed U.S. core inflation slowed a lot faster than expected. It came in at 0.2% in June against market expectations for 0.3%, while headline annual CPI fell to 3%.

"I pretty much understand the reason as to why the dollar is dropping and it's pretty compelling for dollar bears given the data that we have been seeing. Short term, we will see a little more dollar weakness," said Brad Bechtel, global head of FX, at Jefferies in New York.