US July CPI matched forecasts at 3.4% year on year, and the dollar moved lower after the data.
Before the report, markets priced a 44% chance of a rate hike in September. Traders also priced in 24.4 basis points of hikes for this year. Meanwhile, USD/JPY traded at 159.04 before the release.
After the data, September hike odds fell to 39%. USD/JPY then slipped to 158.92. The source said the dollar weakened more broadly, although moves against major peers stayed limited to about 15 to 20 pips.
US July CPI Moves Markets
Gold rose after the report and reached a session high. It gained $55 to $4,422. Stock index futures also advanced. S&P 500 futures were last up 0.45%.
Meanwhile, US 2-year yields fell 3.6 basis points to 4.18%. The source said the report gave the Fed room to hold again in September. However, it also noted that one more inflation report will come before that decision.
The source also said a standstill in Hormuz continued.
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Source: InvestingLive
