NEW YORK—The dollar rallied against the yen, euro, and other currencies on Tuesday after stronger-than-expected U.S. inflation data boosted investor bets that the Federal Reserve will need to stay aggressive in raising interest rates.
The dollar index, which tracks the greenback against its peers, was up 1.5 percent at 109.85 in its biggest one-day percentage gain since March 2020. It was still below last week’s two-decade peak of 110.79. The index turned positive after the data release.
