US CPI rose 0.1% in July, matching forecasts, reducing Fed rate-hike bets for September to 38%.
The Japanese Yen gave up some gains against the US Dollar after July’s US Consumer Price Index data aligned with expectations. USD/JPY climbed to 159.20 after hitting an intraday low of 158.58 earlier in the session.
Headline CPI increased 0.1% month-over-month, reversing June’s 0.4% decline, while annual inflation slowed to 3.4% from 3.5%. Core CPI rose 0.2% MoM, with the yearly rate easing to 2.5%. The data followed softer-than-expected July Nonfarm Payrolls, further dampening expectations for a Federal Reserve rate hike in September.
US Treasury yields edged lower, and the US Dollar Index (DXY) recovered slightly to 99.82 after dipping to 99.61. Despite the pullback in rate-hike odds, inflation remains above the Fed’s 2% target, with elevated oil prices and Middle East tensions providing some support to the Greenback.