The US dollar weakened on Thursday as inflation data for June missed expectations. The Consumer Price Index (CPI) rose 8.6% year-on-year, which was below the consensus forecast of 8.8%. This was the first time in eight months that inflation had come in below expectations.
The weak inflation data weighed on the dollar, as it reduced the likelihood of further aggressive monetary tightening by the Federal Reserve. The Fed is expected to raise interest rates by 75 basis points at its next meeting on July 26-27. However, the weak inflation data could lead the Fed to raise rates by a smaller amount.
The weakness in the dollar was supportive of other currencies, such as the euro and the pound sterling. The euro rose to a 15-month high against the dollar, while the pound sterling rose to a two-month high.