CANBERA (dpa-AFX) - The U.S. dollar drifted lower against its major counterparts in the European session on Wednesday, as inflation fears reduced a bit after data showed that the nation's prices eased in July from the previous month.
Data from the Labor Department showed that the consumer price index climbed by 0.5 percent in July after jumping by 0.9 percent in June.
Economists had expected consumer prices to rise by 0.5 percent following the advance in the previous month, which reflected the biggest increase since June of 2008.
Excluding food and energy prices, core consumer prices rose by 0.3 percent in July after surging by 0.9 percent in June. Economists had expected core prices to increase by 0.4 percent.
In another development, the U.S. Senate approved $1.2 trillion infrastructure spending plan on Tuesday and passed the legislation to the House for a vote.
U.S. Senate Democrats further voted to proceed with $3.5 trillion budget plan aimed at expansion of social programs.
The dollar rose in the Asian session, as treasury yields firmed on rising hopes for the Fed beginning to reduce bond purchases later this year.
The greenback depreciated to a 2-day low of 1.3876 against the pound, after touching 1.3803, which was its highest level since July 27. The pound-greenback pair had ended yesterday's trading session at 1.3834. Should the greenback dips further, 1.42 is possibly seen as its next support level.
The greenback weakened to a 2-day low of 1.1749 against the euro, registering a drop of 0.4 percent from a 4-1/2-month peak of 1.1706 seen at 3:15 am ET. The pair was worth 1.1717 when it closed deals on Tuesday. Further fall in the currency may challenge support around the 1.20 level.
Final data from Destatis showed that German consumer prices grew at the fastest pace in more than 27 years in July largely due to the low base of comparison.
Consumer prices increased 3.8 percent on a yearly basis in July, faster than the 2.3 percent rise seen in June.
The greenback touched 0.9203 against the franc, falling from near a 5-week peak of 0.9242 recorded at 3:15 am ET. The pound-greenback pair had ended yesterday's trading session at 1.3834. Immediate support for the greenback is likely located around the 0.90 level.
The greenback slipped 0.4 percent to 110.38 against the yen, after a 5-week advance to 110.80 at 4:45 am ET. The pair had closed Tuesday's deals at 110.56. The greenback is seen facing support around the 107.5 level.
The greenback was down against the aussie, at a 5-day low of 0.7387. The greenback was worth 0.7346 per aussie at Tuesday's New York session close. Further downtrend may take the greenback to a support around the 0.76 level.
Survey data from Westpac showed that Australia's consumer confidence weakened in August as the spread of the coronavirus situation locally is weighing on expectations.
The Westpac-Melbourne Institute Index of Consumer Sentiment fell 4.4 percent to 104.1 in August from 108.8 in July. This was the lowest point in a year but remained in positive territory, even in parts of the country facing the biggest virus challenges.
The greenback slid to 0.7056 versus the kiwi, its weakest level since August 6. At Tuesday's close, the pair was valued at 0.7006. The currency may seek support near the 0.72 level.
The greenback reached a 6-day low of 1.2489 against the loonie, down from yesterday's closing value of 1.2517. Extension of downward trading may see the greenback finding support around the 1.23 region.
U.S. monthly budget statement for July is due out in the New York session.
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