Dollar slips to 1-week low, little impact from U.S. inflation rise

* U.S. core CPI rises, helps trim dollar losses
* U.S. jobless claims are better than expected
* July's U.S. rate cut view still intact - analysts
* Graphic: World FX rates in 2019

(Adds comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, July 11 (Reuters) - The dollar inched lower on
Thursday in thin summer trading, as its outlook remained grim
after Federal Reserve Chair Jerome Powell's bleak comments on
the U.S. economy, which bolstered expectations of an interest
rate cut later this month.
Since the middle of May, the dollar index has fallen 1.6%,
with the greenback down 2.6% against the yen.
The dollar, however, trimmed losses against the yen and euro
earlier on Thursday after data showed U.S. underlying consumer
prices rose 0.3% in June, the most in nearly 1-1/2 years, with
solid gains in the costs of a range of goods and service.

In another positive economic report, initial weekly jobless
claims fell to a seasonally adjusted 209,000 for the week ended
July 6, the lowest since April.
The inflation data, however, had little bearing on a widely
expected view of an interest rate decrease this month at the
Fed's next monetary policy meeting, analysts said. That
potential rate cut would be the first in a decade.
"It's unlikely the Fed will be swayed from lowering interest
rates as an insurance policy against future economic weakness,"
said Matthew Eidinger, FX trader at Cambridge Global Payments in
In testimony to Congress on Wednesday, Powell pointed to
"broad" global weakness that was clouding the U.S. economic
outlook amid uncertainty about the fallout from the trade
conflict with China and other nations.
His comments affirmed market expectations - money markets
expect one rate cut later this month and a cumulative 68 basis
points of cuts until the end of 2019 - but market watchers said
Powell's views will drive the dollar.
"If there was any doubt that the data was really compelling,
especially the strong U.S. nonfarm payrolls report last week, I
think we had our answer yesterday, with Powell's pretty strong
argument for easing as soon as July," said Mazen Issa, senior FX
strategist at TD Securities in New York.
The Fed chief gave a second day of testimony to members of
Congress on Thursday, and generally reiterated comments he made
the previous day.
In afternoon trading, the dollar index was slightly lower at
97.06, after earlier falling to a one-week low.
The dollar was flat versus the yen at 108.45 yen, and
was likewise little changed against the Swiss franc at 0.9899
The euro, meanwhile, was up 0.1% against the dollar at
$1.1256, even as expectations grew that the European
Central Bank would loosen policy.
Focus has turned to the release of the ECB's June minutes
and whether the bank has started discussions about a return to
asset purchases.
Sterling rose from six-month lows to $1.2523, up
0.1% on the day. But it remains down for the week, amid
Britain's economic gloom and a fast-approaching Brexit deadline.

Currency bid prices at 2:50 PM (1850 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Euro/Dollar EUR= $1.1254 $1.1249 +0.04% -1.87% +1.1285 +1.1246
Dollar/Yen JPY= 108.4500 108.4600 -0.01% -1.64% +108.5200 +107.8700
Euro/Yen EURJPY= 122.10 122.01 +0.07% -3.26% +122.1000 +121.6300
Dollar/Swiss CHF= 0.9898 0.9894 +0.04% +0.86% +0.9904 +0.9848
Sterling/Dollar GBP= 1.2523 1.2499 +0.19% -1.83% +1.2571 +1.2500
Dollar/Canadian CAD= 1.3071 1.3080 -0.07% -4.15% +1.3091 +1.3042
Australian/Doll AUD= 0.6975 0.6957 +0.26% -1.05% +0.6988 +0.6955
Euro/Swiss EURCHF= 1.1143 1.1131 +0.11% -1.00% +1.1143 +1.1106
Euro/Sterling EURGBP= 0.8986 0.8999 -0.14% +0.02% +0.9005 +0.8967
NZ NZD= 0.6663 0.6645 +0.27% -0.80% +0.6688 +0.6644
Dollar/Norway NOK= 8.5438 8.5798 -0.42% -1.10% +8.5828 +8.5320
Euro/Norway EURNOK= 9.6160 9.6533 -0.39% -2.93% +9.6610 +9.6156
Dollar/Sweden SEK= 9.3874 9.4198 -0.29% +4.73% +9.4223 +9.3713
Euro/Sweden EURSEK= 10.5677 10.5981 -0.29% +2.96% +10.6031 +10.5560

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Grebler
and Jonathan Oatis)

First Published: 2019-07-11 02:25:35
Updated 2019-07-11 20:56:14

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