U.S. Dollar Slides Amid Weaker-Than-Expected PPI Data

(RTTNews) - The U.S. Dollar value edged lower after the U.S. Producer Prices Index came in unexpectedly softer, prompting traders to lower bets on rate hike by the U.S. Federal Reserve. In addition, following U.S. President Donald Trump's announcement that Iran is seeking a meeting with the U.S., safe-haven demand for the dollar lowered with easing war tension.

The U.S. Dollar Index, DXY, which measures the Greenback against a basket of other major currencies was last seen trading at 100.52, down by 0.37 (or 0.37%) today.

The month-on-month producer prices declined 0.30% in June and year-on-year, it increased 5.50% for the same month, according to Bureau of Labor Statistics.

Core producer prices rose in June by 0.20% from the previous month and year on year, it increased 4.70%.

The Mortgage Bankers Association of America revealed that the Purchase Index in the U.S. decreased to 157.20 on July 10 from 169.50 of the previous week.

While against the Euro, the USD was trading at 1.146, down by 0.38%, against the GBP, the USD was trading at 1.354, down by 1.18%.

Against the USD, the Japanese Yen was trading at 162.198, up by 0.02% and the Swiss Franc was trading at 0.805, up by 0.47%.

Against the Canadian Dollar was trading at 1.404, up by 0.14%. Data released by Statistics Canada today revealed that the month-on-month manufacturing sales rose 1.30% to a record C$78.10 billion in May, beating market expectations for a 1.10% increase after a 4.20% gain in April.

Against one unit of Australian Dollar, the USD was trading at 0.701, down by 0.48%.

Yesterday, the Consumer Price Index increased by 3.50% over the 12 months through June after surging 4.20% in May. The core CPI inflation remained unchanged on a month-on-month basis, after gaining 0.20% in May.

Traders lowered their bets on U.S. Federal Reserve rate hike at its month-end meeting.

Currently, investors are betting only on a 10.20% chance of a quarter-basis-point interest rate-hike in the upcoming meeting of the U.S. Federal Reserve on July 28-29 while the odds, on rates being held at the current level, stand at 89.80% according to the CME Group's FedWatch Tool.

Yesterday, Trump warned that the U.S. military campaign may get really bad next week if Iran refuses to strike a deal with the U.S. over its nuclear program. Trump threatened to target bridges and power plants.

Iran's Islamic Revolutionary Guards Corps issued a counter-threat stating it will halt all energy exports from the Middle East.

Energy experts have cautioned that the U.S. national average price of gasoline could exceed $4 per gallon in a week's time if the war deepens.

U.S. military concluded a fresh round of airstrikes during daylight hours.

The IRGC attacked U.S. assets in Bahrain, Kuwait, and Jordan and claimed heavy damage on the U.S. Fifth Fleet headquarters.

Axios reported that Trump discussed the next phase of action with officials in the White House Situation Room.

Despite concerns about the possibility of war intensifying, investors are optimistic that the governments of both nations will explore all diplomatic avenues to end the war.

U.S. Central Command announced that today afternoon, U.S. forces launched a second wave of strikes against Iran, targeting military capabilities used to threaten commercial shipping through the Strait of Hormuz.

In an interview with Fox Business' Edward Lawrence, Trump stated that Iran reached out seeking a meeting with the U.S. He left open the possibility of destroying the Islamic Revolutionary Guard Corps if negotiations fail.