Dollar Loses Ground Against Major Counterparts After Inflation Data

(RTTNews) - The U.S. dollar drifted down against its major rivals on Thursday after data showed the nation's producer prices rose less than expected in June, raising hopes the Fed will pause its tightening after hiking rates by 25 basis points later this month.

The Labor Department's report showed the producer price index crept up by 0.1% in June after falling by a revised 0.4% in May. Economists had expected producer prices to rise by 0.2% compared to the 0.3% dip originally reported for the previous month.

The report also said the annual rate of producer price growth slowed to just 0.1% in June from a revised 0.9% in May.

The pace of growth was expected to slow to 0.4% from the 1.1% originally reported for the previous month.

The data suggested that Fed rate hikes could stop after the 25-basis point increase at the July 25-26 meeting.

Meanwhile, a separate Labor Department report showed initial jobless claims slipped to 237,000 in the week ended July 8th, a decrease of 12,000 from the previous week's revised level of 249,000. Economists had expected jobless claims to inch up to 250,000 from the 248,000 originally reported for the previous month.

The dollar index dropped to 99.74, losing nearly 0.8%.

Against the Euro, the dollar weakened to 1.1226 from 1.1130, and dropped to 1.3136 against Pound Sterling, losing from 1.2988.

Against the Japanese currency, the dollar is weak, fetching 138.06 yen, after closing at 138.51 yen on Wednesday.

The dollar is trading at 0.6887 against the Aussie, down sharply from the previous close of 0.6787. The Swiss franc os trading at CHF 0.8588 against the dollar, gaining from CHF 0.8676. Against the Loonie, the dollar is weak at C$1.3113.