Home›Forex›Major Pairs›Dollar slides after cooler inflation, easing odds of a…

Dollar slides after cooler inflation, easing odds of a July Fed hike

June CPI fell to 3.5% from 4.2%, and core inflation eased to 2.6% from 2.8%, driving the Fed-hike probability down to 17% for July.

Reported · Written up by our desk · Major Pairs

The US dollar retreated after June inflation data showed slower price growth, with consumer price inflation cooling from 4.2% to 3.5% and core inflation easing from 2.8% to 2.6%, according to Action Forex.

Action Forex said market pricing shifted accordingly, with the chance of a July Fed rate hike dropping from 40% to 17%. It also noted expectations for two rounds of monetary tightening in 2026 fell from 58% to 35%.

Investors cited the view that May CPI may have marked a peak and that disinflation should continue, reducing the need for Fed action. The outlet also referenced Kevin Warsh, who criticized the Fed in Congressional testimony and cautioned against relying on a single inflation report.

Beyond rate expectations, Action Forex linked oil market sentiment to broader macro moves, saying Brent has risen in more than half of the last six sessions while risks around Middle East shipping chokepoints have heightened concerns about supply disruption. It also cited API data showing US oil stocks fell for a 13th straight week, with the pace slower than expected, and said traders are awaiting US EIA figures.

Latest closeBrent $85.36 ▲2.5%

More like this

Sources