USD Withers Awaiting US CPI!

<p>&nbsp;The US dollar retreated from Wednesday's highs amid limited trading range as investors cautiously awaited US inflation data.</p><p><br /></p><p>Major currencies traded slightly higher today, but no significant changes were recorded.</p><p><br /></p><p>Selling of US dollars by state-owned Chinese banks helped the yuan rise from a one-month low even as the country slipped into deflation.</p><p><br /></p><p>Data in the Asian session showed China's consumer prices (CPI) fell for the first time in more than two years in July.</p><p><br /></p><p>Even so, rather than increasing interest in the safe-haven, it strengthened investors' view that the Chinese government may take additional stimulus measures to support the economy.</p><p><br /></p><p><br /></p><p>This pushed the Aussie and New Zealand dollars up slightly from their respective two-month lows against the greenback.</p><p><br /></p><p>While euro trading also shows an increase, the price is still stuck below the 1.1000 level against the US dollar, while the pound remains hovering around the 1.2750 level.</p><p><br /></p><p>The market's focus is now shifting to more important data, namely US consumer inflation which will determine the direction of the Federal Reserve's next policy.</p><p><br /></p><p>At the time of writing, the dollar index, which measures the greenback's strength, was trading lower at around 102.35 against a group of major currencies.</p>