The dollar hit a two-decade high on Thursday after the U.S inflation moderated lesser than the market expectations, keeping the Federal Reserve on course to tighten policy aggressively.
The US Dollar Index (DXY) which measures the buck against six major peers, added about 0.1% to 104.22, hitting its highest since December 2002.
However, the consumer price index climbed 8.3% on an annual basis in April, easing from 8.5% in March but outstripping the 8.1% estimate of economists.
The US CPI climbed 8.3% on an annual basis in April, easing from the 8.5% in March but outstripping the 8.1% forecasted estimates.
The Federal Reserve has intensified its effort to moderate the inflationary pressures, hiking interest rates for the first time in about two decades this month.
The market is fully priced for at least a half percentage point increase to the policy rate at each of the next two Fed decisions, on June 15 and July 27, according to the CME FedWatch Tool.
According to a senior currency strategist at the Australia Bank, Rodrigo Castril, the stronger-than-expected U.S. inflation print heightened concerns over the need for the Fed to accelerate its policy-tightening path.
The US aggressive stance to increase its interest rates might further weaken the Naira as export costs would most likely increase and debt servicing will become more expensive, thus, causing increased inflationary pressures for the country.