WASHINGTON (dpa-AFX) - The U.S. dollar shed ground against other major counterparts on Thursday, continuing to slide with markets assessing the inflation data.
After yesterday's data showed inflation came in softer than expected in the month of July, data from the Labor Department today showed the producer price index for final demand fell by 0.5% in July after surging by a revised 1% in June. The decrease marked the first drop in producer prices since April 2020.
Economists had expected producer prices to edge up by 0.2% compared to the 1.1% jump originally reported for the previous month.
The report also showed the annual rate of producer price growth slowed to 9.8% in July from 11.3% in June. Economists had expected the annual rate of growth to slow to 10.4%.
Meanwhile, the Labor Department said core producer prices, which exclude prices for food, energy and trade services, crept up by 0.2% in July after rising by 0.3% in June.
The annual rate of core producer price growth also slowed to 5.8% in July from 6.4% in the previous month.
Following yesterday's tamer than expected consumer price inflation data, today's report added to optimism that the Federal Reserve will slow the pace of its interest rate hikes next month.
Another data from the Labor Department showed first-time claims for U.S. unemployment benefits saw another modest increase in the week ended August 6th, rising to 262,000, an increase of 14,000 from the previous week's revised level of 248,000. Economists had expected jobless claims to inch up to 263,000 from the 260,000 originally reported for the previous week.
The dollar index dropped to 104.65 around mid morning, but recovered to 105.16 later on in the session, cutting its loss to just 0.4%.
Against the Euro, the dollar weakened to $1.0325 from $1.0300.
The dollar is trading at $1.2197 against Pound Sterling, after drifting down to $1.2219.
Against the Japanese currency, the dollar climbed higher, fetching 133.04 yen a unit, compared with 132.89 yen on Wednesday.
The dollar is weaker against the Aussie at 0.7107. The Swiss franc is stronger at CHF 0.9417 a dollar, while the Loonie is up slightly at C$1.2770 a dollar.
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