The U.S. dollar continued to decline during trading on Wednesday, after losing the momentum that had driven it to its highest level in about two weeks.
This decline followed the release of U.S. inflation data, which showed a slower pace of inflation than market expectations.
This led to a decline in investors’ expectations that the Federal Reserve would raise interest rates in the near term.
Conversely, concerns remained that rising oil prices could lead to increased inflationary pressures in the future.
The dollar fell 0.1 percent against the Japanese yen to 162.08 yen.
The euro also rose 0.1 percent to $1.1433, while the British pound climbed by the same percentage to $1.3401.
Meanwhile, the New Zealand dollar held onto its gains near a one-month high, stabilizing at $0.5819.
The Australian dollar also stabilized at $0.6983.
In the same context, the dollar index, which measures the performance of the U.S. currency against a basket of six major currencies, fell to 100.81 points.
This followed a 0.35 percent decline in the previous session, its largest daily drop in about two weeks.
Official data showed that the annual inflation rate in the United States slowed to 3.5 percent in June.
This figure was lower than expected.
The Consumer Price Index also fell by 0.4 percent on a monthly basis, marking its first decline since April 2020, supported by lower energy prices.
Meanwhile, markets continue to monitor geopolitical developments in the Gulf region, after oil prices rose to their highest levels in a month.
This raises concerns about a resurgence of inflationary pressures, despite the positive U.S. data.
As a result, the trajectory of U.S. monetary policy will be closely monitored in the coming months.
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