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USD slips after June CPI prints cooler than expected

Headline CPI fell 0.4% month over month and core CPI was flat, but Fed officials signaled one report will not end the inflation fight.

Reported · Written up by our desk · Major Pairs

The U.S. dollar is under pressure following June CPI data that came in cooler than expected, renewing expectations that inflation is still moving in the right direction, according to Forexlive. Headline CPI declined 0.4% month over month versus a -0.1% consensus, while core CPI was unchanged at 0.0% versus forecasts for a 0.2% rise.

The report’s softness appeared broad-based, with core goods prices falling for a second straight month and core services excluding housing declining 0.2%. Shelter costs rose modestly, up 0.12%, but the overall inflation picture still was not seen as fully resolved.

Forexlive noted that Fed Governor Christopher Waller reiterated that one favorable inflation print is not enough, and policymakers would need several months of subdued inflation to grow more confident that price pressures are contained. The data likely reduces the urgency for another rate hike at the next FOMC meeting, though crude oil has rebounded to around $80.20 a barrel, which could weaken the disinflation boost from earlier energy declines.

Alongside the dollar’s move lower, Forexlive reported mixed U.S. equities, with the Dow down and the Nasdaq up 310 points, plus lower yields. The two-year Treasury yield was down 7.4 basis points to 4.189%, and the 10-year fell 3.6 basis points to 4.573%.

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