Investing.com - The dollar edged lower against a basket of other currencies on Wednesday after data showing that U.S. inflation rose at a slower than expected rate last month, as investors awaited the minutes of the Federal Reserve’s latest meeting.
The Labor Department reported that the consumer price index ticked up just 0.1% in July, below forecasts for a 0.2% gain.
Underlying inflation, which excludes food and energy costs, also rose 0.1%, compared to expectations for a 0.2% increase.
The dollar has been boosted by expectations that the Fed start to raise interest rates in the coming months, possibly as soon as September, but monetary tightening is likely to remain gradual, given the subdued inflation outlook.
Investors were hoping that the minutes of the Fed’s July meeting would provide more clarity on its plans to hike short-term interest rates for the first time since 2006.
The US dollar index, which tracks the greenback against a basket of six major rivals, dipped to 96.92.
The euro was slightly higher in thin trade, with EUR/USD rising 0.26% to 1.1052.
The single currency received a boost after Germany’s parliament approved a third bailout deal for Greece.
The dollar edged down against the yen and extended losses against the Swiss franc.
Sterling remained supported after data on Tuesday showing an increase in inflation bolstered expectations for a rate hike by the Bank of England in the coming months.
GBP/USD was last at 1.5643, holding below the seven-week high of 1.5716 set on Tuesday.
The commodity linked currencies were broadly lower, with USD/CAD up 0.61% to 1.3134 and NZD/USD was down to 0.6571.
The loonie, as the Canadian dollar is also known, remained under pressure as U.S. oil prices held near six-year lows after bearish storage data exacerbated concerns over the global supply glut.
The Australian dollar slid to 0.7322.