Investing.com - The U.S. dollar inched down on Thursday, extending losses made after comments from Federal Reserve Chairman Jerome Powell raised expectations that the central bank will cut rates at its next meeting.
The market's convictions weren't shaken by data from the Labor Department that showed underlying consumer prices increased in June to their highest in almost one-and-a-half years. Additionally,initial jobless claims also fell to their lowest since April, suggesting that the rebound in the labor market in June is still continuing.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, fell 0.1% to 96.632 by 10:15 AM ET (14:15 GMT).
Testifying before Congress on Wednesday, Powell said the central bank will “act as appropriate” as policymakers consider "uncertainties" emanating from slowing investment, trade disputes and other issues affecting the global economy.
"Powell’s framing is an attempt to signal to the market that while the economy is overall still strong, a rate cut in July should more be seen as precautionary," said Nordea Markets currency strategist Morten Lund. "This would also be in line with the view of many of the FOMC members, as indicated in the June minutes."
The dollar was lower against the Japanese yen, with USD/JPY falling 0.2% to 108.25. The euro rose with EUR/USD up 0.1% to $1.1256 and USD/CAD lost 0.1% to 1.3069.
Meanwhile GBP/USD gained 0.3% to $1.2538 as surveys showed Boris Johnson closing in on victory in the Conservative Party leadership contest. That's despite fresh warnings from the Bank of England of the economic damage that could follow a "no-deal" Brexit - a scenario that both Johnson and his rival Jeremy Hunt have accepted as a possible outcome. The winner is expected to be announced on July 23.