Dollar remains under pressure as traders reassess rate hike bets
By John McCrank
NEW YORK, Aug 11 (Reuters) - The dollar was slightly lower on Thursday following a 1% loss the previous day when data showed U.S. inflation was not as hot as anticipated in July, prompting traders to dial back future rate hike expectations by the Federal Reserve.
Investors slashed bets on the possibility that the Fed will raise interest rates by 75 basis points for a third consecutive time to help tame decades-high inflation when it meets in September after a report on Wednesday showed U.S. consumer prices were unchanged in July.
The dollar recorded its biggest decline in five months following the report as traders readjusted their forecasts to factor in the chance that inflation may have peaked.
Fed funds futures traders are now pricing in a 58% chance of a 50-basis-point hike in September and a 42% chance of a 75-basis-point increase. FEDWATCH
The greenback's slide continued into Thursday, falling as much as 0.57% early in the session, but then clawed back the bulk of those losses. The dollar index was down 0.114% at 105.1 at 3:30 p.m. EDT (1930 GMT), well off of its two-decade peak of 109.29 hit on July 14.
"We might have seen the peak, but I'd be cautious about expecting significant dollar weakness from here," UBS FX strategist Vassili Serebriakov said.
The currency's drop may have been cushioned by Fed officials who attempted to temper expectations of significantly looser policy, with Neel Kashkari telling a conference on Wednesday that the central bank was "far, far away from declaring victory" on inflation.
Data on Thursday showed that U.S. producer prices unexpectedly fell in July amid a drop in the cost for energy products and that underlying producer inflation appears to be on a downward trend, while jobless claims rose for a second straight week in a labor market that remains tight.
The positive inflation data helped equity markets surge on Wednesday and into Thursday, but the rally fizzled as investors questioned the Fed's next steps.
"The loosening of financial conditions that is occurring across the global financial system is not in alignment of where Fed officials would like to take policy, so the reality for FX traders is that there may be a short horizon on market movements right now," said Karl Schamotta, chief market strategist at Corpay.
The euro and Japanese yen were among the currencies to benefit from the dollar's weakness on Wednesday.
The euro was last up 0.23% at $1.0322, while the yen dipped 0.06% to 132.95 yen after a rise of more than 1% on Wednesday. EUR=EBS JPY=EBS .
Sterling slid 0.18% versus the dollar to $1.2195, giving back some of its more than 1% gain the previous day. GBP=D3
World FX rates Link
Reporting John McCrank in New York; additional reporting by
Iain Withers in London
Editing by Toby Chopra, Will Duham and Matthew Lewis
免責聲明: XM Group提供線上交易平台的登入和執行服務，允許個人查看和/或使用網站所提供的內容，但不進行任何更改或擴展其服務和訪問權限，並受以下條款與條例約束：（i）條款與條例；（ii）風險提示；（iii）完全免責聲明。網站內部所提供的所有資訊，僅限於一般資訊用途。請注意，我們所有的線上交易平台內容並不構成，也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。