(Bloomberg) -- The dollar fell the most in more than a month, erasing gains fueled by hotter-than-expected inflation data.
The Bloomberg Dollar Spot Index declined 0.3% Thursday, its biggest drop since Sept. 3, as artificial intelligence-related concerns fueled a bond rally that pushed yields lower and weighed on the currency. The greenback fell against nearly all of its major peers, falling about 1% against the Swiss franc.
“As AI debt has sold off, there has been a flight to safer assets like Treasuries, which is pushing down yields, which is pressuring the dollar,” said Andrew Hazlett, a foreign-exchange trader at Monex Inc.
The slide came despite new economic data pointing to ongoing inflation pressures. US producer prices advanced 1.3% in September, the most in more than four years, according to the Bureau of Labor Statistics data released Thursday. Meanwhile, retail sales also beat forecasts, boosted by gasoline spending.
That followed a better than expected consumer inflation report which revived expectations for Federal Reserve interest-rate hikes just a day earlier, briefly boosting the dollar to its highest level since May 2025.