FOREX-Dollar slips to 1-week low, little impact from U.S. inflation rise

Reuters

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    * 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 http://tmsnrt.rs/2egbfVh

 (Adds comment, updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, July 11 (Reuters) - The dollar inched lower on
Thursday in thin summer trading, as its outlook remained grim
after Federal Reserve Chair Jerome Powell's bleak comments on
the U.S. economy, which bolstered expectations of an interest
rate cut later this month.
    Since the middle of May, the dollar index has fallen 1.6%,
with the greenback down 2.6% against the yen. 
    The dollar, however, trimmed losses against the yen and euro
 earlier on Thursday 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.
 urn:newsml:reuters.com:*:nL2N24B17S
    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.
    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. That
potential rate cut would be the first in a decade.
    "It's unlikely the Fed will be swayed from lowering interest
rates as an insurance policy against future economic weakness,"
said Matthew Eidinger, FX trader at Cambridge Global Payments in
Montreal.
    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.  urn:newsml:reuters.com:*:nW1N23Q002
    His comments 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.
    "If there was any doubt that the data was really compelling,
especially the strong U.S. nonfarm 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.
    The Fed chief gave a second day of testimony to members of
Congress on Thursday, and generally reiterated comments he made
the previous day.  urn:newsml:reuters.com:*:nL2N24C14C
    In afternoon trading, the dollar index was slightly lower at
 97.06  .DXY , after earlier falling to a one-week low.
    The dollar was flat versus the yen at 108.45 yen  JPY= , and
was likewise little changed against the Swiss franc at 0.9899
franc  CHF= .
    The euro, meanwhile, was up 0.1% against the dollar at
$1.1256  EUR= , 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 the bank has started discussions about a return to
asset purchases.    
    Sterling rose from six-month lows to $1.2523  GBP=D3 , up
0.1% on the day. But it remains down for the week, amid
Britain's economic gloom and a fast-approaching Brexit deadline.
 
========================================================
    Currency bid prices at 2:50 PM (1850 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1254        $1.1249     +0.04%         -1.87%      +1.1285     +1.1246
 Dollar/Yen       JPY=        108.4500       108.4600    -0.01%         -1.64%      +108.5200   +107.8700
 Euro/Yen         EURJPY=     122.10         122.01      +0.07%         -3.26%      +122.1000   +121.6300
 Dollar/Swiss     CHF=        0.9898         0.9894      +0.04%         +0.86%      +0.9904     +0.9848
 Sterling/Dollar  GBP=        1.2523         1.2499      +0.19%         -1.83%      +1.2571     +1.2500
 Dollar/Canadian  CAD=        1.3071         1.3080      -0.07%         -4.15%      +1.3091     +1.3042
 Australian/Doll  AUD=        0.6975         0.6957      +0.26%         -1.05%      +0.6988     +0.6955
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1143         1.1131      +0.11%         -1.00%      +1.1143     +1.1106
 Euro/Sterling    EURGBP=     0.8986         0.8999      -0.14%         +0.02%      +0.9005     +0.8967
 NZ               NZD=        0.6663         0.6645      +0.27%         -0.80%      +0.6688     +0.6644
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.5438         8.5798      -0.42%         -1.10%      +8.5828     +8.5320
 Euro/Norway      EURNOK=     9.6160         9.6533      -0.39%         -2.93%      +9.6610     +9.6156
 Dollar/Sweden    SEK=        9.3874         9.4198      -0.29%         +4.73%      +9.4223     +9.3713
 Euro/Sweden      EURSEK=     10.5677        10.5981     -0.29%         +2.96%      +10.6031    +10.5560
 
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G10 FX valuations    https://tmsnrt.rs/32mX9GU
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 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Grebler
and Jonathan Oatis)
 ((gertrude.chavez@thomsonreuters.com; 646-223-6322; Reuters
Messaging: rm://gertrude.chavez.reuters.com@reuters.net))

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