The dollar edged lower against a basket of the other major currencies on Monday after its recent rally to multi-month highs stalled amid diminished expectations for an aggressive pace of monetary tightening by the Federal Reserve this year.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.23% at 92.23 by 03:42 AM ET (07:42 AM GMT).

The index hit four-and-a-half month highs of 93.26 on Wednesday before retreating, to end the week almost unchanged, snapping three straight weeks of gains.

The rally in the dollar lost momentum after tame U.S. inflation data tempered expectations for a faster pace of rate hikes by the Fed.

The Fed raised rates in March and projected two more rate hikes this year, although many investors had seen three hikes as possible.

Earlier Monday, Cleveland Fed head Loretta Mester reiterated her support for gradual rate hikes given that inflation has not yet reached the U.S. central bank’s 2% target in a sustained way.

The euro moved higher, with EUR/USD rising 0.26% to 1.1972, having recovered from last week’s lows of 1.1821, a level not seen since late December.

The dollar edged higher against the yen, with USD/JPY inching up 0.12% to 109.53.

The pound gained ground, with GBP/USD climbing 0.24% to 1.3576.

Sterling hit four month lows against the dollar on Thursday after the Bank of England left interest rates on hold as expected, but its cut growth and inflation forecasts for this year and next.

Elsewhere, the Australian dollar was higher, with AUD/USD up 0.16% to 0.7553, extending its recovery from the eleven month lows of 0.7411 reached last week.

The New Zealand dollar remained on the back foot, with NZD/USD slipping 0.19% to 0.6952, holding above the five month low of 0.6901 reached on Thursday after the country’s central bank left rates on hold and said the next move in rates could just as easily be a cut as a hike.