The U.S. dollar declined against other major currencies on Tuesday after dovish comments from a top Federal Reserve official.

San Francisco Fed President John Williams said on Monday afternoon that the U.S. central bank should consider setting a higher inflation target. The Fed currently targets a 2-percent inflation goal.

Analysts said Williams' comments dented market expectation of an interest-rate hike soon this year.
The dollar index, which measures the greenback against six major peers, was down more than 1 percent to 94.426 in the morning session, the lowest level in nearly seven weeks.

The index pared some losses and traded at 94.799 in late trading on Tuesday after New York Fed President William Dudley said that the Fed may raise rates as soon as September.

Atlanta Fed President Dennis Lockhart also said Tuesday that there could be one or two rate increases this year.

On the economic front, the U.S. Consumer Price Index (CPI) for all urban consumers was unchanged in July on a seasonally adjusted basis, in line with market estimates, the Labor Department reported Tuesday.

The index for all items less food and energy rose 0.1 percent in July, but posted its smallest increase since March.

U.S. industrial production increased 0.7 percent in July, better than expectations of 0.3 percent, after moving up 0.4 percent in June, said the Federal Reserve Tuesday.

In late New York trading, the euro rose to 1.1275 dollars from 1.1185 dollars of the previous session, and the British pound climbed to 1.3036 dollars from 1.2874 dollars. The Australian dollar went up to 0.7698 dollars from 0.7682 dollars.

The dollar bought 100.26 Japanese yen, lower than 101.23 yen in the previous session. The dollar fell to 0.9621 Swiss francs from 0.9723 Swiss francs, and it inched down to 1.2844 Canadian dollars from 1.2912 Canadian dollars.

Source : XINHUA