By Caroline Valetkevitch NEW YORK (Reuters) – The dollar rallied against the yen, euro and other currencies on Tuesday after stronger-than-expected U.S. inflation data boosted investor bets that the Federal Reserve will need to stay aggressive in raising interest rates. The dollar index, which tracks the greenback against its peers, was up 1.5% at 109.85 and hit its highest in a week, heading back toward last week’s two-decade peak of 110.79. The index turned positive after the data release. The euro, pound and yen all weakened sharply. The euro was last down 1.5% versus the greenback at $0.99…