Summary Dollar traded mostly lower as weak US inflation data cooled expectations of Fed interest rate hike.
NEW YORK (AFP) - The dollar traded mostly a bit lower Thursday as weak US inflation data cooled expectations of a Federal Reserve interest rate hike next week.
US import prices fell 1.8 percent in August, their steepest drop since January, the Labor Department said in a report that could help dissuade the Fed from raising zero-level interest rates at its coming policy meeting, analysts said.
"The US economy showed its Achilles heel in another subpar reading of inflation, news that weighed on the dollar and dampened expectations the Fed would raise rates next week," said Joe Manimbo of Western Union Business Solutions.
Manimbo said that all eyes would be on Friday s US wholesale inflation and consumer sentiment data. "Lackluster news could see the dollar favor its back foot heading into next week s crucial Fed meeting," he added.
The dollar extended Wednesday s gain against the Japanese currency, rising to 120.63 yen around 2100 GMT from 120.54 at the same time the previous day.
The British pound, meanwhile, advanced against the dollar and the euro after the Bank of England stayed the course on monetary policy as expected, leaving its key rate at a record low of 0.5 percent.
