July 11, 2019 / 2:48 PM / 3 months ago

FOREX-Dollar dips to one-week low; U.S. inflation rise has little impact

    * U.S. core CPI rises, helps trim dollar losses
    * U.S. jobless claims are better than expected
    * July's U.S. rate cut view still intact -analysts
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Adds U.S. data, analyst comment, FX table, updates prices,
changes dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, July 11 (Reuters) - The dollar slipped to near a
one-week low on Thursday after Federal Reserve Chair Jerome
Powell's bleak comments on the U.S. economy bolstered
expectations of an interest rate cut later this month, which
would be the first in a decade.
    Since the middle of May, the dollar index has fallen 1.6%,
with the greenback down 2.6% against the yen. 
    The dollar trimmed losses against the yen and euro after
data showed U.S. underlying consumer prices rose 0.3% in June,
the most in nearly 1-1/2 years, with solid gains in the costs of
a range of goods and service.
    In another positive economic report, initial weekly jobless 
claims fell to a seasonally adjusted 209,000 for the week ended
July 6, the lowest since April. Economists polled by Reuters had
forecast claims rising to 223,000 in the latest week.
    The inflation data, however, had little bearing on a widely
expected view of an interest rate decrease this month at the
Fed's next monetary policy meeting, analysts said.
    "If there was any doubt that the data was really compelling,
especially the strong U.S. non-farm payrolls report last week, I
think we had our answer yesterday, with Powell's pretty strong
argument for easing as soon as July," said Mazen Issa, senior FX
strategist at TD Securities in New York.
    In testimony to Congress on Wednesday, Powell pointed to
"broad" global weakness that was clouding the U.S. economic
outlook amid uncertainty about the fallout from the trade
conflict with China and other nations.
    His comments on Wednesday affirmed market expectations -
money markets expect one rate cut later this month and a
cumulative 68 basis points of cuts until the end of 2019 -  but
market watchers said Powell's views will drive the dollar.
    The Fed chief was giving a second day of testimony to
members of Congress on Thursday.
    In mid-morning trading, the dollar index slipped 0.1% to
97.039, after earlier falling to a one-week low.
    The dollar was also down 0.2% versus the yen to 108.26 yen
, and slipped 0.1% against the Swiss franc to 0.9886 franc
    "Once we get a quarter-point rate cut, which markets are
widely expecting, Powell will keep all options open on the
table, and that means the dollar's outlook is uncertain," said
Manuel Oliveri, an FX strategist at Credit Agricole in London.  
    The euro, meanwhile, was little changed at $1.1253,
even as expectations grew that the European Central Bank would
loosen policy.
    Focus has turned to the release of the ECB's June minutes
and whether it has started discussions about a return to asset
    The British pound rose from six-month lows to $1.2535
. But it remains down for the week, amid Britain's
economic gloom and a fast-approaching Brexit deadline.  
    Currency bid prices at 10:33AM (1433 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1255        $1.1249     +0.05%         -1.87%      +1.1285     +1.1251
 Dollar/Yen       JPY=        108.2900       108.4600    -0.16%         -1.79%      +108.4600   +107.8700
 Euro/Yen         EURJPY=     121.93         122.01      -0.07%         -3.40%      +122.0800   +121.6300
 Dollar/Swiss     CHF=        0.9885         0.9894      -0.09%         +0.72%      +0.9900     +0.9848
 Sterling/Dollar  GBP=        1.2533         1.2499      +0.27%         -1.76%      +1.2571     +1.2500
 Dollar/Canadian  CAD=        1.3080         1.3080      +0.00%         -4.08%      +1.3083     +1.3042
 Australian/Doll  AUD=        0.6975         0.6957      +0.26%         -1.05%      +0.6988     +0.6955
 Euro/Swiss       EURCHF=     1.1127         1.1131      -0.04%         -1.13%      +1.1137     +1.1106
 Euro/Sterling    EURGBP=     0.8979         0.8999      -0.22%         -0.06%      +0.9005     +0.8967
 NZ               NZD=        0.6667         0.6645      +0.33%         -0.73%      +0.6688     +0.6644
 Dollar/Norway    NOK=        8.5478         8.5798      -0.37%         -1.06%      +8.5828     +8.5320
 Euro/Norway      EURNOK=     9.6212         9.6533      -0.33%         -2.88%      +9.6610     +9.6156
 Dollar/Sweden    SEK=        9.3870         9.4198      -0.29%         +4.72%      +9.4223     +9.3713
 Euro/Sweden      EURSEK=     10.5670        10.5981     -0.29%         +2.95%      +10.6031    +10.5560
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Saikat Chatterjee in London; Editing by Dan Grebler)
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