U.S. Dollar Continues to Slide as Wholesale Inflation Cools in June

The U.S. dollar faced another decline on Thursday as recent data revealed that U.S. wholesale inflation cooled more than anticipated in June.

According to Dow Jones Market Data, the ICE U.S. Dollar Index DXY, a gauge of the currency against a basket of six major rivals, dropped to 99.94 on Thursday, marking its lowest level since April 20, 2022.

This downward trend in the value of the greenback also indicates its sixth consecutive day of decline, signifying the longest losing streak since September 2021.

Meanwhile, the euro EURUSD continued its upward trajectory against the dollar on Thursday, propelling the EUR/USD pair up by 0.6% to its highest point since February of the previous year. The British pound GBPUSD also strengthened against the greenback, pushing the GBP/USD pair nearly 1% higher, reaching its highest level since April 2022. Additionally, the Australian Dollar/USD pair saw a rise of 1.3% on Thursday.

Analyst James Harte from TickMill Group noted, “With recent jobs data having cooled and inflation now close to target, the Dollar is undergoing a heavy repricing.” Harte further emphasized that several Federal Reserve officials had expressed the belief that tightening measures were nearly complete, which has become a significant focus for traders leading up to the July FOMC meeting. As of now, the short-term outlook for the USD remains bearish, with additional losses expected by the end of the week.

In June, the U.S. producer price index experienced a modest increase of 0.1%, falling short of economist expectations, which had forecasted a 0.2% rise. Moreover, the year-on-year growth in wholesale prices slowed down to 0.1% from 1.1% in the previous month.

This data follows the consumer-price index for June, which revealed a deceleration in the rate of inflation to its lowest level since 2021.

Despite these developments, U.S. stocks demonstrated gains on Thursday. The Dow Jones Industrial Average rose by 0.2%, the S&P 500 increased by 0.6%, and the Nasdaq Composite saw a gain of 1.2%, according to FactSet data.