US Dollar Index Weakens on Softer Inflation Data and Cooling Fed Rate Hike Odds

The US Dollar Index (DXY) has continued its downward trend for the second consecutive day, trading around 99.90 in Asian hours on Friday.

Market attention is focused on the upcoming July Retail Sales data release later in the day, while the Greenback faces pressure following a softer-than-expected US inflation report.

The Bureau of Labor Statistics reported that US wholesale costs for goods and services were flat in July, below the anticipated 0.2% growth and following a revised 0.1% decline in June.

Rabobank's Jane Foley observes that 'Fed rate hike speculation has recently suffered a setback on the back of recent US data releases,' opening up prospects for further slippage for the greenback.