Dollar Slips Amid Inflation Data and Trump's Fed Tensions
The U.S. dollar weakened following U.S. inflation data supporting expectations of a Federal Reserve rate cut. President Trump's tensions with Fed Chair Jerome Powell further pressured the currency. Investors anticipate a 98% chance of a rate cut next month, while emerging currencies show slight gains.
The U.S. dollar weakened on Wednesday as investors reacted to tame inflation data, strengthening the case for a potential Federal Reserve rate cut next month. President Donald Trump's efforts to assert control over U.S. institutions also contributed to the dollar's decline.
U.S. consumer prices increased marginally in July. Investors cheered the data, bolstering a 98% likelihood of a Fed rate cut next month. This dragged down the dollar, with the euro and yen gaining slightly.
Market confidence in the dollar was further eroded by Trump's tensions with Fed Chair Jerome Powell. Simultaneously, sterling and the Australian dollar showed gains, while bitcoin's rally stalled. Ethereum made gains due to increased adoption, overtaking bitcoin as the most traded asset on OKX.
(With inputs from agencies.)
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