Dollar Falls as Flat Producer Price Data Cools Rate Hike Bets
The dollar fell on Thursday after producer price data showed a flat reading in July, coming after Wednesday's consumer price inflation report that showed barely any increase last month.
According to the Producer Price Index for final demand, there was no change from June's revised 0.1% drop. Economists polled by Reuters had forecast a 0.2% rebound.
This soft data led traders to further pare back expectations of a Federal Reserve rate hike in September. Fed funds futures now show a 31% probability of a September hike, down from 40% on Wednesday and 55% a week earlier.
Noel Dixon, senior macro strategist at State Street, said the components of Thursday's report that feed into the personal consumption expenditures data due later this month suggest that the report 'should be pretty good.'