Dollar Down As Soft U.S. Inflation Data Supports Fed Pause Hopes

(RTTNews) - The U.S. dollar was lower against its most major counterparts in the New York session on Thursday, as the nation's annual inflation rose less than expected in July, reinforcing expectations that the Federal Reserve will leave interest rates unchanged next month.

Data from the labor Department showed that inflation accelerated to 3.2 percent year-on-year in July from 3.0 percent in June. Economists had expected the pace of price growth to accelerate to 3.3 percent.

The consumer price index rose by 0.2 percent on a monthly basis in July, matching the uptick seen in June as well as expectations.

Excluding food and energy prices, core consumer prices also rose by 0.2 percent for the second straight month in July, in line with estimates.

The annual rate of growth by core consumer prices slowed to 4.7 percent in July from 4.8 percent in June. The rate of growth was expected to be unchanged.

A separate report showed that first-time claims for U.S. unemployment benefits rose much more than expected in the week ended August 5.

The report said initial jobless claims climbed to 248,000, an increase of 21,000 from the previous week's unrevised level of 227,000. Economists had expected jobless claims to inch up to 230,000.

The greenback fell to a 2-week low of 1.1064 against the euro and a 10-day low of 0.8689 against the franc, from yesterday's closing values of 1.0973 and 0.8771, respectively. The greenback is likely to find support around 1.12 against the euro and 0.84 against the franc.

The greenback weakened to a 2-day low of 1.3372 against the loonie and an 8-day low of 0.6616 against the aussie, from Wednesday's close of 1.3418 and 0.6528, respectively. The greenback is seen finding support around 1.30 against the loonie and 0.68 against the aussie.

The greenback dropped to a 6-day low of 0.6118 against the kiwi, from a 2-day high of 0.6040 seen at 5:15 pm ET. At yesterday's close, the pair was quoted at 0.6051. Next key support for the currency is likely seen around the 0.63 level.

The greenback slipped to a 9-day low of 1.2818 against the pound, from a 2-day high of 1.2707 it logged at 9 pm ET. The pair had closed yesterday's deals at 1.2718. If it drops further, it may find support around the 1.29 area.

In contrast, the greenback climbed against the yen, touching nearly a 5-week high of 144.30. The pair was worth 143.71 at Wednesday's close. The currency may challenge resistance around the 146.00 level.