Dollar drops as consumer prices fall in June
Istanbul, July 11 (Hibya)—The dollar dropped on Thursday after data showed that headline consumer prices unexpectedly fell in June, which may make it more likely that the Federal Reserve will begin cutting interest rates in the coming months.
The dollar index was down 0.42 percent at 104.51 and got as low as 104.38, the lowest since June 12. The euro reached $1.08935, the highest since June 7. Meanwhile, the Japanese yen jumped against the dollar after the U.S. inflation report. The dollar fell as much as 2.1 percent to 158.3 yen.
Market sources said the dollar's selling was most likely the result of profit-taking after weak U.S. data. Yet, traders remain on high alert for signs of fresh intervention by Japanese authorities to boost a currency languishing near 38-year lows.
In early Asia trading, the British pound rose to a one-month high of $1.28545, extending a 0.48 percent gain from the previous session. Comments from BoE policymakers caused markets to scale back bets on an easing cycle to begin next month.
On Wednesday, BoE Chief Economist Huw Pill said price pressures in Britain’s economy were persistent and that the timing of a first-rate cut was an “open question”. His colleague Catherine Mann signalled she is unlikely to vote for an interest rate cut in August.
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