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Dollar slips after CPI falls short of expectations

ReutersNEW YORK (Reuters) — The U.S. dollar weakened against a basket of currencies on Friday, after data showed U.S. consumer prices rose less than expected in July, pointing to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year.

The dollar index, which tracks the greenback against six major currencies, was down 0.13 percent to 93.28, after earlier falling to a one-week low of 92.992.

The U.S. consumer price index edged up 0.1 percent last month after being unchanged in June. Economists polled by Reuters had expected the CPI to rise 0.2 percent in July.

“If the data continues to come in on the softer side, the market might start to price the Fed staying on hold this year,” said Sireen Harajli, FX strategist at Mizuho in New York.

Federal funds futures suggested traders saw a 40 percent chance that the Fed would increase short-term rates at its Dec. 12-13 policy meeting, compared with 42 percent shortly before the release of the July consumer price data.Speech

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