U.S. Dollar Falls Ahead Of Inflation Data

(RTTNews) - The U.S. dollar dropped against its major counterparts in the European session on Thursday, as investors await U.S. weekly jobless claims data and inflation figures later in the day for clues to Federal Reserve's monetary path.

The U.S. CPI report is forecast show inflation rising 0.2 percent in July, matching the uptick seen in June.

The annual rate of consumer price growth is expected to accelerate to 3.3 percent in July from 3.0 percent in June, while the annual rate of core consumer price growth is expected to hold at 4.8 percent.

Markets are hoping that cooler inflation will push the Fed to end its rate hike campaign.

The CME Group's FedWatch Tool is currently indicating an 87.0 percent chance the Fed will leave rates unchanged following its next meeting scheduled for September 19-20.

The greenback declined to a 6-day low of 1.1026 against the euro and a 2-day low of 0.8722 against the franc, off its early highs of 1.0967 and 0.8776, respectively. The next possible support for the currency is seen around 1.12 against the euro and 0.85 against the franc.

The greenback fell to 1.2769 against the pound and 143.71 against the yen, reversing from an early 2-day high of 1.2707 and near a 5-week high of 144.10, respectively. The greenback is likely to find support around 1.29 against the pound and 139.00 against the yen.

The greenback dropped to 0.6563 against the aussie and 0.6081 against the kiwi, from an early high of 0.6522 and a 2-day high of 0.6040, respectively. The greenback is seen finding support around 0.67 against the aussie and 0.63 against the kiwi.

The greenback touched 1.3386 against the loonie, setting a 2-day low. If the greenback drops further, it may find support around the 1.30 area.

Looking ahead, U.S. CPI and monthly budget statement for July, as well as weekly jobless claims for the week ended August 5 will be released in the New York session.