Dollar skids as soft US inflation weighs; Fed meeting looms next week

The dollar slumped against major currencies on Wednesday after softer-than-expected U.S. inflation data released on Tuesday eased short-term expectations about tapering of asset purchases from the Federal Reserve.

The dollar index, a measure of the greenback's value against six major currencies, has traded between 92.3 and 92.9 over the past week as several Fed officials suggested the U.S. central bank could reduce buying debt securities by the end of the year, even after a weaker-than-expected payrolls report earlier this month.