(Adds U.S. data, FX table, analyst comment, bullets, NEW YORK dateline, byline, updates prices) * U.S. data shows growing economic weakness, dollar weakens * French inflation rises, euro gains * U.S. dollar strength is “exaggerated” – analyst By Alun John and Gertrude Chavez-Dreyfuss LONDON/NEW YORK, Feb 28 (Reuters) – The dollar was flat to slightly lower against major currencies on Tuesday in choppy trading, after a round of mainly weak economic data, but still on track for its first monthly gain since September, as investors wagered that interest rates will remain elevated for some time. The greenback’s overall rally this month gathered momentum in recent weeks as upbeat economic data led to mounting expectations that the Federal Reserve will have to raise interest rates more than initially expected. U.S. rate futures have priced in a peak fed funds rate, the Federal Reserve’s target policy rate, of…
