Investing.com - The U.S. dollar pared back earlier gains after tame inflation data supported the case for the Federal Reserve to cut interest rates.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.05% to 96.690 by 10:15 AM ET (14:15 GMT), after reaching an earlier high of 96.757.
Consumer inflation edged up 0.1% in May and was up 1.8% on the year, slipping from the Federal Reserve's 2% target.
Traders have been speculating on the possibility of the central bank cutting rates due to slowing inflation and rising trade tensions after Fed Chairman Jerome Powell signaled the bank would “act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective.”
The Fed is expected to keep rates unchanged at its meeting on June 19, with an 83.2% chance of a cut priced in for its July meeting, according to Investing.com’s Fed Rate Monitor Tool.
The dollar was lower against the safe-haven Japanese yen, with USD/JPY falling 0.1% to 108.40 as trade tensions lingered. President Donald Trump said he had no intention of a trade deal with Beijing absent concessions on five major, but unspecified, points.The comments appear to reduce the chance of a deal if the two leaders meet at the G20 summit on June 28-29.
Elsewhere, the euro inched down, with EUR/USD falling 0.1% to 1.1315. Sterling was higher, with GBP/USD gaining 0.1% to 1.2734, while USD/CAD rose 0.04% to 1.3282.