The dollar drifted on Thursday after an overall benign reading of U.S. consumer inflation prompted traders to pare back their bets on a September rate hike from the Federal Reserve. Data on Wednesday showed U.S. consumer prices increased 0.1% in July, in line with economist expectations, leading money markets to reduce the odds of a September rate hike to 40%, down from 54% a week ago, according to CME Group's FedWatch. Next up is wholesale inflation in the form of the producer price index, which economists polled by Reuters expect to have moderated to 4.9% in July from 5.5% in June, ahead of the core personal consumption and expenditures index, which has typically been the Fed's preferred measure of inflation, on August 26. Fed Chair Kevin Warsh has indicated he prefers other metrics, but until that is clear, markets will take their cue from CPI, PPI and core PCE, analysts said. The dollar edged lower against the yen to around 159.3 yen, about 2.7% below late July's 40-year highs near 164 that sparked historic joint intervention by the United States and Japan, while the euro was a touch stronger at $1.1537 and the pound steadied at $1.349, shrugging off data that showed the UK economy unexpectedly grew in June.
CME Group Inc