12.08.202612:39:17UTC+00DXY Retreats After Inflation Data

The dollar index slipped to about 99.9 on Wednesday after US consumer price data for July came in broadly in line with expectations, tempering concerns about imminent Federal Reserve rate hikes. Core consumer prices, which exclude food and energy, rose 0.2% month-on-month and 2.5% year-on-year, matching the slowest annual pace since March 2021. Headline consumer prices increased 0.1% from June and 3.4% from a year earlier.

The cooling in inflation, coming on the heels of last week’s weaker-than-expected employment report, could ease pressure on the Fed as policymakers weigh price stability against risks to the labor market. The latest data also offered some reassurance in the face of elevated oil prices and ongoing geopolitical uncertainty. Meanwhile, tensions in the Strait of Hormuz remained high, with President Donald Trump asserting that the US had “total control” of the waterway as Washington and Tehran stayed locked in negotiations over its reopening.