Dollar Loses Ground Against Major Counterparts After Inflation Data
(RTTNews) - The U.S. dollar drifted lower against its major counterparts on Tuesday after data showing a slowdown in consumer price inflation raised hopes the Federal Reserve will pause rate increases when it announces its monetary policy decision on Wednesday.
Data from the Labor Department showed the consumer price index inched up by 0.1% in May after climbing by 0.4% in April. Economists had expected prices to tick up by 0.2%.
Core consumer prices rose by 0.4% in May, matching the increase seen in each of the two previous months as well as economist estimates.
The Labor Department also said the annual rate of consumer price growth slowed to 4% in May from 4.9% in April. The annual rate of core consumer price growth also slowed to 5.3% in May from 5.5% in April, in line with expectations.
Following the release of the report, CME Group's FedWatch Tool is indicating a 91.9% chance the Fed leaves interest rates unchanged.
The dollar index dropped to 103.05 soon after the release of the consumer inflation data, and despite recovering some lost ground subsequently, remains more than 0.3% down at 103.30.
Against the Euro, the dollar has weakened to 1.0793 from 1.0759. The dollar is weak against Pound Sterling at 1.2610, easing from 1.2514.
Against the Japanese currency, the dollar is strong, fetching 140.23 yen a unit, nearly 0.5% more than the previous close of 139.60 yen.
The dollar is weak against the Aussie at 0.6765. Against Swiss franc, the dollar has firmed to CHF 0.9051, and against the Loonie, is trading at C$1.3316, with higher oil prices strengthening the Canadian currency.
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