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USD rises broadly after July CPI matches expectations

Headline CPI rose 0.1% month over month and 3.4% year over year, keeping the market-implied odds of a September rate hike near 39%.

Reported · Written up by our desk · Major Pairs

Forexlive reports that the July U.S. CPI release was the main catalyst for FX and broader markets, coming in largely as expected and showing further moderation in annual inflation.

According to Forexlive, headline CPI increased 0.1% month over month and 3.4% year over year, while core CPI rose 0.2% for the month and 2.5% year over year. The report left the Fed with additional room to remain on hold in September, with the market-implied probability of a September rate hike slipping to around 39% from 44% before the release.

Forexlive also said the U.S. dollar reversed earlier declines and ended the day higher versus all major currencies. The largest gain was against the New Zealand dollar, while the smallest gain was versus the Australian dollar, with the greenback also posting gains versus the Swiss franc, Canadian dollar, and Japanese yen.

In rates and equities, Forexlive noted that Treasury yields initially fell after the CPI release but later retraced as the session progressed, ending the day mixed. Stocks finished mostly higher with technology leading and the Russell 2000 closing at a record high, alongside strength in AI and data center related shares.

Latest closeRussell 2000 3,045.48 ▲0.6%

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