Dollar Rises Toward Decade High as Core Inflation Fuels Demand

The dollar rallied toward the strongest level against the euro in more than a decade after a report showed U.S. inflation may be closer to rebounding, giving the Federal Reserve scope to raise interest rates.

The U.S. currency gained versus most of its major peers as a higher-than-forecast increase in so-called core inflation, which excludes food and fuel, offset concern that overall consumer prices tumbled last month. Fed Chair Janet Yellen told Congress this week that short-term declines in inflation are linked to the plunge in crude-oil prices and are likely to prove temporary.