Dollar Slips on Dovish US CPI Report

The dollar slid after a July U.S. CPI report that matched market expectations and eased rate-hike odds. The DXY00 fell 0.08%, helped by a 2.1 basis point drop in the 10-year Treasury yield. On a year-on-year basis, July CPI eased to 3.4% from 3.5%, while core CPI moved to 2.5% from 2.6%. On a month-on-month basis, CPI rose 0.1% and core CPI 0.2%. Markets now price a 37% probability of a 25 bp Fed hike at the Sept. 15–16 FOMC meeting. EUR/USD rose 0.08%, while USD/JPY dipped 0.15% as yen expectations for Fed action cooled. Gold and silver gained as the dollar eased.