Dollar Slips Against Major Currencies After Soft Inflation Data

(RTTNews) - The U.S. dollar drifted lower against its major counterparts on Thursday amid rising bets about an interest rate cut by the Federal Reserve in September after data showed a drop in the nation's consumer price inflation in the month of June.

The Labor Department said U.S. consumer price index slipped by 0.1% in June after coming in unchanged in May. Economists had expected consumer prices to inch up by 0.1%.

Excluding food and energy prices, core consumer prices crept up by 0.1% in June after rising by 0.2% in May. Core prices were expected to increase by another 0.2%.

The report also said the annual rate of consumer price growth slowed to 3% in June from 3.3% in May. Economists had expected the pace of price growth to decelerate to 3.1%. The annual rate of core consumer price growth also slowed to 3.3% in June from 3.4% in May. The pace of growth was expected to remain unchanged.

A separate data from the Labor Department showed first-time claims for U.S. unemployment benefits fell by much more than expected in the week ended July 6th, dropping to 222,00, a decrease of 17,000 from the previous week's revised level of 239,000.

Economists had expected jobless claims to edge down to 236,000 from the 238,000 originally reported for the previous week.

The dollar index fell to 104.08 after the release of the inflation data, and recovered some lost ground subsequently. Still, at 104.48, it remained well below the flat line, losing about 0.55%.

Against the Euro, the dollar weakened to 1.0866 from 1.0830. The dollar was down at 1.2913 against Pound Sterling, losing from 1.2849.

Against the Japanese currency, the dollar weakened to 158.86 yen, down sharply from the previous close of 161.70 yen. The dollar eased to 0.6759 against the Aussie.

The Swiss franc strengthened to 0.8963 a unit of U.S. dollar, while the Loonie weakened to 1.3633 a unit of the greenback.