"Moderating price pressures suggest the Fed may be less willing to lift U.S. borrowing costs for a third time this year," Omer Esiner, chief market analyst at Commonwealth FX in Washington, said in a note.
The U.S. dollar remained broadly on the back foot against major currencies.
Against the Japanese yen, the greenback was down 0.65 percent to 112.53 yen, after hitting a near two-week low of 112.28 yen.
"Dollar-yen has got a lot more downside and it could easily go to 110 yen before the summer is out, in fact the next few weeks, especially with U.S. yields heading lower," Franulovich said.
The higher yielding Aussie and New Zealand dollars jumped, with the Australian dollar hitting a near 15-month high as risk appetite was robust with global stock markets hitting record highs and after dovish comments from global policymakers.
The Aussie was 1.23 percent higher against the greenback at $0.7821.
South Africa's rand hit a two-week high against the greenback.
The euro was up 0.61 percent against the greenback to $1.1465 and sterling was 1.24 percent higher at $1.3096, after hitting $1.3093, its highest since September, 2016.