U.S. interest rates though are expected to remain higher for longer. Data showing U.S. pending home sales posting their largest gain in 2-1/2 years failed to lift the dollar, however. Traders now expect the Fed to raise interest rates to around 5.4% by the September meeting, according to pricing in rate futures markets . At the beginning of February, they envisaged rates rising to a peak of just 4.9%. "Whereas headline rates are falling, the trend of rising core inflation rates has been unbroken," he said.

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