The U.S. dollar came under pressure on Wednesday after official data showed that producer price inflation failed to meet expectations last month.
The U.S. Department of Labor reported that the producer price index came in flat for July, missing expectations for a 0.3% increase after a 0.8% increase in June. The core producer price index did rise slightly, up 0.1%, but missed forecasts for a 0.2% increase.
The news proved to be a disappointment for investors, who were hoping for strong data to confirm the U.S. economy has recovered enough to persuade the Fed to begin phasing out its $85 billion-a-month asset purchase program in September.
The dollar index, which tracks the performance of the dollar vs a basket of six other major currencies, dipped 0.02% to 81.75 on the news.
In Europe the euro fell slightly against the dollar despite data showing that the eurozone returned to growth in the second quarter,.
The European economy expanded by 0.3% in the three months to June. Economists had expected quarter-on-quarter growth of 0.2%. It was the fastest quarterly expansion since the first quarter of 2011.
France’s economy also expanded 0.5% in the three months to June, following two consecutive quarters of contraction, while Germany’s economy expanded by a larger than forecast 0.7%.
Despite the news the euro remained flat for most of the session, with EUR/USD ending the U.S. session down 0.02% to 1.3260. Investors appear to still be cautious about the strength of recovery in the eurozone.
In the U.K. sterling was boosted after official data showed that the number of people claiming unemployment benefit in the U.K. remained unchanged at 7.8% in June, in line with expectations.
The news meant cable strengthened against the dollar, with GBP/USD rising 0.40% to 1.5510 at the close of the U.S. session. acerca de U.S. Dollar Under Pressure After Inflation Data Miss and Other Top Forex News