The dollar stood at its highest levels of the year against sterling and the euro on Thursday, while the yen was smarting from its sharpest drubbing in a month, after the hottest U.S. inflation reading in a generation fanned bets on rate hikes.
Wall Street closed sharply lower on Wednesday as surging consumer prices curbed investor risk appetite, and stoked worries of a protracted wave of red hot inflation.
The dollar traded near a 2 1/2-week high to major peers on Monday as quickening inflation in the United States boosted the case for earlier Federal Reserve interest rate hikes ahead of a policy decision on Wednesday.
The major averages closed in record territory Monday, led by energy and consumer discretionary stocks ahead of data-laden week including a monetary policy update from the Federal Reserve.
The S&P 500 slipped Wednesday, as a decline in cyclical sectors including financial and energy offset and an intraday rally in tech ran out of steam.