US producer prices fell 0.5% in July, compared to a 1.1% rise in June, while analysts expected a 0.2% rise, while core prices rose 0.4%. 

On a yearly basis, producer prices rose 9.8%, slowing down from 11.3%, while core prices rose 7.6%, also slowing down from 8.2%.

Gold futures titled lower in European trade for the first session in four days, as the dollar index backed off July 28 highs amid a lack of data from the euro zone and ahead of US data later today.

As of 09:28 GMT, gold futures due in December fell 0.16% to $1,805 an ounce, while the dollar index fell 0.20% to 105.01. 

Earlier US data showed consumer prices rose less than expected, paving the way for a 50 basis points Fed rate hike at the next meeting, instead of 75 basis points. 

Recent data showed US consumers expect one-year inflation at 6.2%, down from 6.8%, while three-year inflation to be down to 3.2% from 3.6%, as gasoline prices decline.

From the US, producer prices are expected up 0.2% in July, while core prices are expected up 0.5% m/m. 

US unemployment claims are expected up 4 thousand to 264 thousand last week, while continuing claims fell 9 thousand to 1.407 million.

Fed Chicago President Charles Evans said the labor sector is very lively and strong and lauded employment numbers, and expressed strong optimism for the US economy's growth in the second half of the year. 

Evans expects growth between 1.2% and 2% next year, with the Fed supposed to hike rates six month before that, expecting final interest rates by 3.5% by year's end, and could reach 4% later. 

Other Fed members expressed confidence in the economy as inflation numbers continue to taper off and moderate, however the Fed remains on a path to tighten monetary policies and hiked rates to maintain a lid on prices. 

Euro rose in European trade near two-month highs against dollar amid a lack of data from Europe and ahead of some important US data today.

As of 08:59 GMT, EUR/USD rose 0.41% to 1.0340, with a session-high at 1.0341, after rising 0.84% yesterday, testing July 5 highs.

Earlier US data showed consumer prices rose less than expected, paving the way for a 50 basis points Fed rate hike at the next meeting, instead of 75 basis points. 

Recent data showed US consumers expect one-year inflation at 6.2%, down from 6.8%, while three-year inflation to be down to 3.2% from 3.6%, as gasoline prices decline.

Five-year inflation forecasts fell as well to 2.3% from 2.8%, and we'll get a better idea about current inflation rates in the US today.

A reversal in yields curves between two-year and five-year US treasury yields paves the way for serious depression in the US later this year. 

From the US, producer prices are expected up 0.2% in July, while core prices are expected up 0.5% m/m. 

US unemployment claims are expected up 4 thousand to 264 thousand last week, while continuing claims fell 9 thousand to 1.407 million.

US stock indices rose on Wednesday after the release of US inflation data. 

US consumer prices rose 8.5% y/y in July, less than 8.7% expected, and down from 9.1% in June. 

Core prices rose 5.9% y/y last month, and 0.3% m/m, while analysts expected a 0.2% rise. 

Gasoline prices rose 7.7% y/y, the highest since April 2020, after rising 11.2% in June, while food costs rose 10.9%.

Dow Jones rose 1.5% as of 14:31 GMT to 33,254, while S&P 500 rose 1.6% to 4,186, as NASDAQ climbed 2% to 12,740.