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Dollar Declines Against Euro and Japanese Yen After US Inflation Data
The US dollar fell against its European counterpart, the euro, and the Japanese yen, during trading on Tuesday, August 12, after data released by the US Consumer Price Index (CPI) reinforced expectations of a Federal Reserve interest rate cut at its September meeting.
The euro rose 0.63% to $1.1688, recovering from its previous loss against the US currency. The dollar also fell 0.29% against the Japanese yen, recording 147.71 yen.
The British pound rose 0.62% against the US currency to $1.3511 after data revealed further weakness in the UK jobs market, albeit at a slower pace, while wage growth remained strong, confirming the Bank of England's caution about cutting interest rates.
The Australian dollar rose 0.31% to $0.6533, despite the Reserve Bank of Australia's decision to cut interest rates by a quarter percentage point, which was in line with expectations.
Meanwhile, data released by the U.S. Bureau of Labor Statistics on Tuesday revealed that the U.S. Consumer Price Index (CPI) rose 0.2% in July, following a 0.3% increase the previous month.
The CPI increased 2.7% year-on-year last month, the same rate as in June.
This compares with economists' expectations in a Reuters poll for a 0.2% monthly and 2.8% annual increase in July.
Carl Schamuta, senior market economist at Corbay, commented: "Core inflation remains subdued, giving policymakers room to maneuver as they address initial signs of weakness in the labor market."
