U.S. Dollar Stays Nearly Flat After Soft Inflation Data


The U.S. dollar stayed nearly flat on Thursday, as investors digested the U.S. consumer price index (CPI) report that showed a moderate increase in July.

The dollar index, which measures the greenback against six major peers, was up 0.03 percent to 102.5222 in late trading.

The U.S. CPI rose 0.2 percent last month, matching the gain in June, the Labor Department reported on Thursday. The CPI climbed 3.2 percent in the 12 months through July, up from a 3.0 percent rise in June, which was the smallest year-on-year gain since March 2021.

The core CPI, which excludes food and energy prices, gained 0.2 percent in July, the same as the increase in June. On the 12-months basis, the core CPI grew 4.7 percent after rising 4.8 percent in June.

“The July CPI report offered more convincing evidence that inflation pressures are abating,” EY-Parthenon senior economist Lydia Boussour said on Thursday.

“Federal Reserve officials will likely look at the report as one more step down the disinflationary path,” Boussour said. “But with inflation still far from its 2 percent destination, the Fed will likely maintain a hawkish bias and keep the door open to further rate hikes if the data justifies it.”

After a swift drop following the latest CPI report earlier in the session, the U.S. dollar quickly rebounded as U.S. Treasury bond prices increased, helping the greenback regain lost ground.

A separate report from the Labor Department on Thursday showed initial claims for state unemployment benefits increased 21,000 to a seasonally adjusted 248,000 for the week ending Aug. 5.

The four-week moving average of claims, a less volatile reading, ticked up by 2,750 to 228,250, according to data.

In late New York trading, the euro was up to 1.0990 U.S. dollars from 1.0975 dollars in the previous session, and the British pound fell to 1.2691 U.S. dollars from 1.2724 dollars.

The U.S. dollar bought 144.7080 Japanese yen, higher than 143.6760 Japanese yen of the previous session. The U.S. dollar decreased to 0.8760 Swiss francs from 0.8773 Swiss francs, and it was up to 1.3421 Canadian dollars from 1.3417 Canadian dollars. The U.S. dollar decreased to 10.6760 Swedish Krona from 10.6838 Swedish Krona.