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Dollar Index holds below 101 as traders pare hawkish Fed bets

After June US CPI came in softer than expected, CME FedWatch showed the odds of a rate hike this month fell to 16.6% from 41.7%.

Reported · Written up by our desk · Major Pairs

The US Dollar Index, which gauges the greenback against six major currencies, was trading about 0.12% lower near 100.80 as traders scaled back expectations for Federal Reserve rate hikes this year, according to FXStreet.

The shift followed June US CPI data released by the US Bureau of Labor Statistics, which showed headline inflation cooling to 3.5% year on year from 4.2% in May. Core CPI rose 2.6% year on year, versus 2.8% estimates and the prior 2.9% reading.

CME FedWatch indicated the probability of a Fed rate increase at this month’s policy meeting eased to 16.6% from 41.7% earlier in the week, as investors repositioned around the inflation outlook.

FXStreet also noted that focus is now turning to the US Producer Price Index for June, due at 12:30 GMT, for additional signals on wholesale inflation, while escalating US-Iran tensions could support safe-haven demand for the dollar.

Latest closeDollar index 100.94 ▼0.3%

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