- Downward break of 96.50 a green light for GBP, EUR gains.
A report from the Labor Department showed US consumer prices rose 0.1% in May, in line with expectations of economists polled by Reuters, pointing to moderate inflation.
Gasoline prices fell 0.5% in May after rising 5.7% in April.
Food prices jumped 0.3 percent in the month, but that was more than offset by a steep 0.6 percent decline in energy costs.
"Market pricing can go up and down so we can't be handcuffed to that". "While core CPI inflation is still at 2.0%, the Fed's preferred measure has typically been a few ticks lower, and today's report does not bode well for an uptick in inflation there".
However, the U.S. currency is just as vulnerable to a steep sell-off if this week's releases add to worries about the economic outlook.More news: Why isn't Instagram taking down the Mark Zuckerberg deepfake?
Both PCE numbers are below the Federal Reserve inflation target of 2%, although it's the consumer price index readings released on Wednesday that are the official US measures of inflation and those are both clearly close to, if-not exactly on, the central bank's target.
The Federal Reserve has been under pressure to contain the economic risk posed by the Trump administration's ongoing trade wars.
The Fed chairman's comments come a day after St. Louis Federal Reserve President James Bullard said in a speech that a rate cut may be needed "soon".
Above: Dollar index shown at daily intervals, alongside Euro-to-Dollar rate (blue line, left axis). That same annual figure was up just 0.2% in May 2018. Therefore, the strength or weakness of the U.S. dollar is so important because it determines the cost of goods.
The Pound-to-Dollar rate was 0.11% higher at 1.2737 but is down 0.02% for 2019 after having fallen 2% in the last month.
US inflation was 1.5% in April, according to the Fed's preferred gauge, and has been under its 2% target for most of the last seven years.More news: People Canceling Trips to Dominican Republic Amid Slew of Deaths
Fresh worries erupted on the trade front after President Donald Trump said he was holding up a deal with China and had no interest in moving ahead unless Beijing agrees to four or five major points. Fed Chair Jerome Powell's promise to act "as appropriate" was not meant to signal a rate cut, he said, but was merely meant to show the USA central bank was not tone deaf to rising trade tensions.
With rate cut expectations running high following Friday's disappointing NFP report, the focus for the USA dollar this week is firmly on the latest inflation and retail sales figures. The CME FedWatch Tool now shows a 17.5 % chance that the Fed will ease rates at the June 19th meeting. He sees more salvation in an interest rate cut.
Inflation has been consistently muted, slightly below or near the Federal Reserve's target of 2% even though the economy is poised in July to set the record for the longest expansion in US history. CPI is a key gauge of changes in purchasing trends and inflation. This was much lower than the 180K that investors were expecting.
He also slammed U.S. interest rates for being too high and criticized the U.S. Federal Reserve. In April, he said the Fed should return to quantitative easing, a financial-crisis-era policy that injected trillions of dollars into the economy.
Time to move your money? A specialist broker can deliver you an exchange rate closer to the real market rate, thereby saving you substantial quantities of currency.More news: Three officially announces 5G plans for the UK