Dollar falls for second straight day ahead of key US inflation data

US dollar fell on the European market on Wednesday against a basket of global currencies, continuing losses for the second day in a row, near its lowest level in two months, with the continuation of the greenback sell-off activity in light of the increasing likelihood for the Federal Reserve to cut interest rates this year, while In order to re-evaluate those possibilities, investors will be looking at key data in the US later in today.

The dollar index fell more than 0.1% to 96.53 points, from the opening level of 96.66 points, with the highest level at 96.72 points.

Yesterday, the index lost 0.1%, the third loss in the past four days, resuming losses that were temporarily halted the previous day within recovery from a two-month low of 96.39 points.

According to the FedWatch tool of the CME, the market is pricing the possibility of a US interest rate cut of around 78% in July and about 97.1% for cuts by December.

The prospects have recently increased widely as the weak economic data from the United States, which indicates that the country's economic growth has slowed in the second quarter of this year, as well as the administration of US President Donald Trump requesting lower interest rates.

Donald Trump on Tuesday criticized the rise in US interest rates and the policy of the Federal Reserve, saying “The Fed Interest rate way too high, added to ridiculous quantitative tightening! They don’t have a clue!”

in order to reassess those possibilities, investors are anticipating major US inflation data later in the day, which in case of a negative data release will reinforce those odds and widen the losses of the US dollar against a basket of currencies.

By 12:30 GMT, the US CPI is expected to rise by 1.9% in May from 2.0% in April, and the monthly reading is expected to show a rise by 0.1% while in the previous reading it rose by 0.3%.