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US: Annual inflation falls more than expected in July to 8.5% vs. 8.7% expected

  • Annual inflation falls from 9.1% to 8.5% in July in the United States.
  • Core CPI unexpectedly remains at 5.9%.
  • The dollar tumbled after the data.

Retail inflation figures for July from the United States showed lower-than-expected data which sent the dollar lower in the market and propelled a rise in stocks and metals.

The Consumer Price Indexidol (CPI) in July remained unchanged from the previous month. The market consensus was for a 0.2% rise. In June, an advance of 1.3% had been registered. It was the lowest figure since 2020. The annual rate showed a decline from 9.1% (the highest in decades) to 8.5%, below the 8.7% market consensus and the lowest in three months.

The Core CPI had a monthly increase of 0.3% lower than the 0.5% expected and the 0.7% of June. The annual rate remained at 5.9%, lower than the 6.1% expected.

The dollar had a sharp drop in the market as a slowdown in inflation was shown. This led to a significant decline in Treasury bond yields, with the market now discounting the possibility of a less aggressive Federal Reserve. Stocks on Wall Street jumped.

More US data will be released later on Wednesday with wholesale inventories and the fiscal result for July. On Thursday it will be the turn of wholesale inflation with the Producer Price Index.

Source: Fx Street

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