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US Dollar Drops After May Inflation Data Trade Deal with China Eases Losses
The US dollar fell against major currencies on Wednesday, June 11, after May inflation data revealed a 2.4% annual increase—lower than analysts’ forecast of 2.5%—boosting speculation that the Federal Reserve might cut interest rates sooner than expected.
During the same session, President Donald Trump announced a trade deal with China. As part of the agreement, the US will supply magnetic materials and rare earths to China, and Chinese students will gain access to US colleges—news that helped limit the dollar’s slide.
Currency Movements:
The USD/JPY rate stabilized at 144.91 yen.
The euro rose approximately 0.3% to $1.1461.
The USD/CHF declined by 0.3% to 0.8203 franc.
Inflation Data Highlights:
US Consumer Price Index (CPI) grew by 0.1% month-over-month in May, lower than expected.
The core CPI, excluding food and energy, also rose 0.1%, under analysts’ forecasts.
Fed Rate-Cut Outlook:
Ahead of this week’s meeting, traders priced in around a 68% chance of a 25 basis-point rate cut in September, up from 57% before the inflation data, as noted by a Goldman Sachs asset management executive, citing the subdued inflation trend.
