Dollar Treads Water on Soft Inflation Data

The US dollar's advance stalled on Thursday as traders reduced bets for a near-term Federal Reserve interest rate hike following a benign US inflation reading.

U.S. consumer prices increased 0.1% in July, matching economists' expectations, which led to a decrease in the odds of a September rate hike to 40%, down from 54% a week ago, according to CME Group's FedWatch.

Currency strategist Michael Wan at MUFG stated that 'the FOMC is likely to maintain a restrictive holding pattern in September rather than a pivot towards a hike.'

The dollar index was flat at 99.976 on Thursday but on course for a 0.4% weekly rise.