Dollar Declines Amid Lower Inflation and Bank of England's Rate Cut

The dollar weakened against major currencies due to a smaller-than-expected rise in U.S. inflation, with the Bank of England's rate cut boosting the sterling. The euro gained slightly as the European Central Bank maintained its steady policy rates, reflecting resilience in the euro zone economy.

The dollar struggled against its major counterparts on Thursday following the release of data indicating a lower-than-anticipated rise in U.S. inflation figures. As a result, the sterling strengthened, bolstered further by a divided Bank of England's decision to cut rates.

According to the latest data from the Labor Department, U.S. inflation increased by 2.7% year-on-year in November, falling short of the 3.1% forecast by economists surveyed by Reuters. This prompted a depreciation of the dollar by 0.14% to 155.43 against the Japanese yen and a 0.26% drop to 0.793 against the Swiss franc.

Meanwhile, the euro saw a slight increase following the European Central Bank's decision to keep policy rates unchanged, signaling confidence in the euro zone's ability to withstand global trade issues. Consequently, the euro rose 0.12% to $1.1753 against the dollar as the dollar index dipped 0.15% to 98.22.

(With inputs from agencies.)