U.S. Dollar Falls 0.2% for Week as Inflation Cools Damps Fed Rate-Hike Expectations

On Friday, July 17, the U.S. dollar index (DXY) ended the week lower at 100.77, down 0.2%, as softer inflation data reduced market expectations for imminent Federal Reserve rate hikes. U.S. consumer and producer price indices rose more slowly in June, while consumer confidence reached its highest level since February, and inflation expectations for the next year declined further, signaling reduced price pressures.

Among major currencies, sterling and the euro posted modest weekly gains of 0.2% each, supported by dollar weakness. The yen held near 162.40 against the dollar, hovering close to 40-year lows touched earlier this month, as the large U.S.-Japan interest rate differential continued to bolster dollar demand.