Dollar continues to fall ahead of major US inflation data

US dollar fell on the European market on Thursday against a basket of global currencies, continuing losses for the second day in a row as US currency sell-off continued following the first part of Federal Reserve Chairman Jerome Powell's semi-annual testimony before the US Congress, opening the way for another cut before the end of this year, and in order to re-evaluate those prospects investors are anticipating the release of major inflation data in the United States for June later in the day, in addition to the second part of Powell's testimony before the Senate Banking Committee.

The dollar index fell by 0.3% to 96.80 points, from the opening level of 97.06 points, with the highest level at 97.06 points.

Yesterday's index lost more than 0.4%, the first loss in the past four days, as correction and profit taking accelerated from a three-week high of 97.59 reached in the previous day and after Jerome Powell's comments before the US Congress.

"The weakness of the global economy, which casts a negative shadow on the outlook for the US economy amid a state of uncertainty about the repercussions of the trade wars that the country is waging with China and other countries," Jerome Powell told the House Financial Services Committee on Wednesday.

Powell said that the US central bank will act as needed to maintain growth and the economic gains and that the mounting risks weigh heavily on economic expectations.

In most of the comments, Jerome Powell appeared pessimistic, in contrast to most of the financial market expectations of a neutral or less pessimistic comments, which increased the likelihood that the Federal Reserve will cut interest rates by 25 basis points at the next meeting later this month, Up to nearly 30% after falling after strong US jobs data on Friday.

The comments also opened the way for the Federal Reserve to cut further interest rates before the end of this year, but this depends on how the US economy is developing in the third quarter of this year, after a certain decline in the second quarter.

To re-evaluate these prospects, investors are expected later in the day to release key US inflation data in June and the second part of Powell's testimony before the US Congress.

By 12:30 GMT, the US CPI reading is expected to rise by 1.6% in June from 1.8% in May, and the monthly reading is expected to rise by 0.0% as the previous reading rose by 0.1%.

The second part of the Fed's semi-annual testimony comes at 14:00 GMT before the Senate Banking Committee.