New York- The dollar dropped against a basket of currencies after US consumer prices rose less than expected in July.
This points to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year.
The Labor Department said on Friday its Consumer Price Index edged up 0.1 percent last month after being unchanged in June.
Economists polled by Reuters had forecast the CPI rising 0.2 percent in July and climbing 1.8 percent year-on-year.
The dollar index, which measures the greenback against a basket of six major rivals, was last up 0.37 percent at 93.052 after touching 92.934, the lowest in a week.
The dollar dropped to its lowest rate in 16 weeks against the Yen, however, pared gains after Russian Foreign Minster Sergei Lavrov said there was a Russian-Chinese plan to defuse tensions between the United States and North Korea.
Investors tend to buy Yen and Franc amid political tensions.
Both currencies made huge gains against the dollar in the light of heightened tensions between both the United States and North Korea.