Dollar Advance Stalls on Benign US Inflation Reading

The dollar's advance stalled on Thursday after the US inflation reading came in lower than expected. The greenback was little changed against the yen, but is still poised to gain about 1% this week.

U.S. consumer prices increased 0.1% in July, which led money markets to reduce the odds of a September rate hike from 54% to 40%, according to CME Group's FedWatch.

Michael Wan, a currency strategist at MUFG, said that the primary dilemma for the Fed lies in weighing inflation risks against a softening labor market.