BREAKING: 🇺🇸 US inflation falls to 3%, lower than expectations.
Dollar falls after Powell remains cautious ahead of inflation
dataJul 10 The dollar fell this Wednesday after Federal Reserve Chair Jerome Powell indicated that the United States central bank is closer to cutting interest rates, but wants to see further drops in inflation.This comes before U.S. consumer price index data on Thursday is expected to show that prices declined on an annual basis in June.Economists polled by Reuters expect Thursday's report to show that prices rose 0.1% on the month, while the core index rose 0.2%. That would put annual gains at 3.1% and 3.4%, respectively. (USCPI=ECI), (USCPF=ECI)Powell said Wednesday that he is not ready to conclude that inflation is moving sustainably toward 2%, although he has "some confidence in that.""Powell has taken a relatively cautious approach," said Karl Schamotta, chief market strategist at Corpay. "But there were enough 'dovish' hints in his narrative to help improve risk appetite in the markets.""The idea that the labor market is no longer generating the inflationary pressure that the U.S. economy was struggling with, and that the Fed was trying to counteract, is helping to reduce the likelihood of further interest rate hikes and also the put a cut in September more firmly on the table," said Schamotta.Traders now see about a 73% chance of a rate cut in September, with a second cut also seen as likely by December, according to the CME's FedWatch tool.The dollar indexDXY, which measures the currency in relation to six others, had a negative change of 0.07%, to 105.05.Meanwhile, the euroEURUSD it gained 0.1% to $1.0823 as investors accepted a political impasse in France.Against the Japanese currency, the dollar advanced 0.29%, to 161.77 yenUSDJPY, approaching 161.96, a 38-year high reached last week.
