Producer price inflation numbers take US dollar lower

Story link: Producer price inflation numbers take US dollar lower

The dollar weakened again on Wednesday as new data showed that consumer price inflation grew less than had been expected in July. The new report, coupled with a weak producer price report on Tuesday, is persuading many analysts that interest rates in the United States might have reached a high point. Core consumer prices were up 0.2 percent in July, while they had been expected to be 0.3 percent higher. Industrial production figures were also lower in July, further indicating that the US economy is slowing down.

The greenback suffered from sell-offs, dropping 0.2 percent to ¥115.72 in relation to the Japanese yen and falling 0.6 percent to $1.2860 versus the euro.

Sterling was also weaker after the latest Bank of England monetary policy committee meeting minutes indicated no more likely rises in UK interest rates soon. While the MPC voted 6 to 1 to raise rates this month, it said that it did so in order to reduce the need for later rate hikes. The UK currency fell 0.2 percent against the euro, to £0.6766. However, the data from the United States allowed sterling to add 0.3 percent versus the US dollar, to $1.9002.

The yen was 0.3 percent lower against the euro to ¥148.83, while elsewhere in Asia the Chinese renminbi was at R7.9885 to the dollar.