The dollar index has hit its strongest level in more than a month following a double whammy of positive data on the US economy.

The dollar index leapt against other major currencies to trade above 101.7 for the first time since January after figures showed US consumer prices climbed in January at the quickest pace in almost five years, while separate figures showed retail sales grew faster than expected in the same month.

The pound hit its weakest level against the dollar in more than three weeks, falling 0.6 per cent to $1.2384, while the euro fell to $1.0521, its lowest level in more than a month against the US currency.

Emerging market currencies reversed earlier gains, with the dollar up more than 1 per cent against the Turkish lira at TRY3.69 and the Russian rouble at Rbs57.75.

The dollar is also expected to react to fresh testimony by Federal Reserve chair Janet Yellen in the second day of her semi-annual appearance at Congress due at 10am EST.

Comments made by Ms Yellen on Tuesday were interpreted as hawkish by markets and strengthened the dollar.

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