Dollar hovers near six-year low, Fed minutes and inflation in focus

The dollar hovered near a six-year trough against the loonie and several European currencies as expectations that U.S. interest rates will stay low undermined the dollar.

Investors await consumer price data from Canada and Britain due later in the day to get hints at how fast major economies will rein in their accommodative monetary policy, which determines the key to the dollar’s movement in the medium term. 

Against the loonie, the dollar stood at C$1.2069, near its lowest level since May 2015. The pound bought 1.4188 on the dollar, near its highest level since late February. 

The euro steadied at $1.2223, while the dollar was little changed at 108.90 yen and 0.8976 Swiss franc. 

U.S. consumer prices climbed 4.2% year-on-year in April, its fastest increase in over a decade. Fed policymakers said this is a temporary surge and that interest rates will remain low.

Elsewhere, the Aussie and the kiwi held onto recent gains, but investors are closely eyeing commodity prices to monitor the currencies breaking out of their ranges.