Dollar hit as year-end U.S. rate hike bets cool after weak data
* Consumer price index unchanged in June
* Dollar down against most major currencies
* Graphic: World FX rates in 2017 http://tmsnrt.rs/2egbfVh
By Saqib Iqbal Ahmed
NEW YORK, July 14 (Reuters) - The dollar fell against a
basket of major currencies on Friday, after weaker-than-forecast
data on consumer prices and retail sales in June raised doubts
about U.S. economic growth and whether the Federal Reserve would
raise interest rates again in 2017.
U.S. consumer prices were unchanged in June and retail sales
fell for a second straight month, pointing to tame inflation and
soft domestic demand.
Economists had forecast the CPI edging up 0.1 percent last
month. Its drop of 0.1 percent in May and the lack of a rebound
in June could trouble Fed officials who have largely viewed the
recent moderation in price pressures as transitory.
"The CPI data begs the question, at what point does
transitory becomes something that is more sustained, in terms of
the softness," said Richard Franulovich, senior currency
strategist at Westpac Banking Corp in New York.
The dollar index, which tracks the greenback against
six major rivals, was down 0.6 percent to 95.152 after earlier
falling to 95.132, its lowest since September 2016.
U.S. interest rates futures rose as traders pared their view
the Federal Reserve would increase rates again in 2017.
"Moderating price pressures suggest the Fed may be less
willing to lift U.S. borrowing costs for a third time this
year," Omer Esiner, chief market analyst at Commonwealth FX in
Washington, said in a note.
The U.S. dollar remained broadly on the back foot against
Against the Japanese yen, the greenback was down 0.65
percent to 112.53 yen, after hitting a near two-week low of
"Dollar-yen has got a lot more downside and it could easily
go to 110 yen before the summer is out, in fact the next few
weeks, especially with U.S. yields heading lower," Franulovich
The higher yielding Aussie and New Zealand dollars jumped,
with the Australian dollar hitting a near 15-month high as risk
appetite was robust with global stock markets hitting record
highs and after dovish comments from global policymakers.
The Aussie was 1.23 percent higher against the greenback at
South Africa's rand hit a two-week high against the
The euro was up 0.62 percent against the greenback to
$1.1466 and sterling was 1.18 percent higher at $1.3088, after
hitting $1.3093, its highest since September, 2016.
(Editing by Chizu Nomiyama)
First Published: 2017-07-14 02:40:22
Updated 2017-07-14 21:22:36
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