US Dollar Index Swings Lower after CPI

2025-08-12 13:00 By Andre Joaquim 1 min. read

The US dollar index fell to 98.3 on Tuesday, holding the sharp decline since touching the two-month high of 100 on July 31st as the latest economic data consolidated bets of an incoming rate cut by the Fed in September.

The headline inflation rate was unchanged at 2.7%, slightly below expectations that rounded to 2.8%, although the core inflation rate inched higher to a six-month high of 3.1%.

Rate traders piled on bets of a 25bps rate cut in the Fed's next meeting following sharp downward revisions to payrolls and pessimistic results from ISM PMIs, pressuring the dollar against other G10 currencies.

In the meantime, President Donald Trump extended the US-China truce by another 90 days to allow more time for negotiations.

Elsewhere, a sharper drop for the DXY was prevented by soft payroll counts in the UK.



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