Dollar Retreats on Soft US Inflation Data

The dollar retreated after US inflation data came in line with forecasts, causing sterling to rise and the euro to gain.

The data showed that US consumer prices rose 0.1% in July on a seasonally adjusted basis, matching consensus and rebounding from a 0.4% drop in June.

Chris Turner, global head of markets at ING, said that a soft print would produce 'a bullish steepening of the yield curve' and see 'the dollar soften, particularly against procyclical currencies.'

The pound's near-flat performance reflected its dollar-sensitivity rather than any domestic development.