The US dollar fell to its lowest level in two and a half months. Investors are betting that rising inflation could erode the value of the currency

Rising inflation expectations in recent years favoured the dollar, as investors assumed that interest rates would be raised in response to higher prices. A disappointing jobs report last week triggered a widespread decline in the greenback, and while soaring commodity prices raised fears of higher inflation in the coming months, markets believe the U.S. Federal Reserve will keep rates low and continue to buy assets

The dollar fell to 89.94, its lowest level since February 25. The Canadian currency hit a new four-year high on Tuesday and stabilized near that level in New York trading, remaining roughly stable over the day at 1.21 Canadian dollars. The pound remains one of the strongest currencies.