U.S. Dollar Holds Steady After July CPI Comes In As Expected

TLDR

• U.S. CPI rose 0.1% in July, annual inflation eased to 3.4%, matching forecasts
• Odds of a September Fed rate hike dropped from 54% to around 40% after the data
• The U.S. Dollar Index traded flat near 100.03 on Thursday
• Iran-U.S. peace talks stalled, keeping oil prices elevated near $89 a barrel for Brent
• The Japanese yen stayed under pressure, with USD/JPY near a two-week high at 159.40

The U.S. dollar held its ground on Thursday after July inflation data came in exactly as expected, giving markets little reason to shift their outlook dramatically.

The U.S. Consumer Price Index rose 0.1% in July on a monthly basis. Annual inflation eased slightly to 3.4%, down from 3.5% in June. Core CPI, which strips out food and energy, rose 0.2% for the month and 2.5% year over year.

All figures matched analyst forecasts. The data triggered little market reaction beyond a modest pullback in rate hike expectations.

The U.S. Dollar Index traded flat at around 100.03 on Thursday morning. The index had gained 0.2% the day before and was holding in a narrow range.

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