US dollar retreats after softer-than-expected inflation data
An employee holds U.S. dollar bank notes at a money changer in Jakarta, Indonesia, April 9, 2025. REUTERS/Willy Kurniawan
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NEW YORK, Sept 30 : The dollar retreated against major currencies on Wednesday following data showing a smaller-than-expected increase in US inflation, which reduced market bets on an interest rate hike from the Federal Reserve.
US Commerce Department data showed that the Personal Consumption Expenditures Price Index, the Fed’s preferred inflation gauge, rose 0.3 per cent last month. Economists polled by Reuters had forecast an increase of 0.4 per cent.
The dollar has been strengthening in tandem with rising US Treasury yields on growing expectations of more Fed rate hikes amid inflation driven by higher oil prices.
But the dollar pared recent gains against the euro following the data while US Treasury yields fell across the board, with the 2-year note yield, which typically moves in step with Fed rate expectations, down 5.82 basis points to 4.831 per cent.
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The euro rose 0.19 per cent to $1.1361. The single currency is still headed for a monthly loss against the dollar after two consecutive months of gains.
The dollar also weakened 0.31 per cent to 156.79 yen and was down 0.05 per cent versus the Swiss franc.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro,fell 0.23 per cent to 101.17. It is still headed for a monthly gain in September, snapping two straight months of losses.
Source: Reuters
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