Dollar Weakens on Tame July CPI Reading

The US dollar weakened on Wednesday after the release of July's consumer price inflation (CPI) data, which matched economists' expectations.

July's CPI rose 3.4% in the 12 months through July, down from June's 3.5%. Core CPI increased 2.5% in the same period, also down from June's 2.6%

This eased concerns that a hot reading could reinvigorate expectations for a near-term interest rate hike by the Federal Reserve.

Traders have pared bets on a rate increase at the Fed's September 15-16 meeting since Friday's jobs report showed employers unexpectedly shed jobs in July.

Fed funds futures traders are now pricing in 40% odds of a September rate hike, down from 44% before Wednesday's data and from 55% a week ago.