Dollar falls, slow inflation soothes pressure on Fed taper
The dollar dropped in early European trade on Thursday. This came after hints of slowing inflation in the United States eased pressure on the Federal Reserve to start its massive bond-buying program.
The Dollar Index that measures the greenback against other major currencies dropped around 0.1% to 92.898.
The USD/JPY pair remained at 110.41, while the EUR/USD pair was slightly higher at 1.174.
The risk-sensitive AUD/USD pair tallied a crash of 0.1% to 0.7365.
Meanwhile, the U.S. consumer price index jumped 0.5% in July after a 0.9% increase in June. This was the largest drop in the month-to-month inflation rate in 15 months.
The CPI, excluding the volatile food and energy components, grew 0.3% last month.
Fed Chair Jerome Powell has reiterated that high inflation statistics will only be temporary once the economy fully reopens. For this reason, the need to quicken the monetary policy tightening remains unnecessary.