Dollar down after poor United States producer prices and rising unemployment claimants

Quarterly earnings outlook

The Federal Reserve expects "very weak" US inflation to rebound thanks to a slide in the dollar and to a labor market that keeps getting hotter, one of the Fed's most influential officials said in comments that reinforce its gradual policy-tightening plan.

Economists polled by Reuters had forecast the CPI rising 0.2 per cent in July and climbing 1.8 per cent year-on-year.

The report said consumer prices in July were up by 1.7% compared to the same month a year ago, reflecting a modest acceleration from the 1.6 year-over-year growth in June. The so-called core CPI rose 1.7 per cent in the 12 months through July - it has now increased by the same margin for three straight months.

Stripping out the volatile food and energy components, consumer prices gained 0.1 per cent for the fourth straight month.

USA job markets have maintained solid growth since the recovery from the Great Recession, while the economy has grown at a modest rate of around 2 percent and the wage growth has also stuck to a moderate 2.5 percent.

Excluding food and energy prices, core producer prices still dipped by 0.1% in July after creeping up by 0.1% in June. The July result followed a tiny 0.1 per cent gain in June.

Investors are somewhat skeptical that the Fed will deliver another rate hike by December, given that its preferred annual inflation reading in recent months has fallen to, and remained at, 1.5 percent, which is below a 2-percent target. The price of goods dropped 0.1% last month.

Energy prices fell 0.1% on the month despite an increase in crude oil prices for the month. The cost of new motor vehicles fell 0.5 per cent, marking the sixth consecutive monthly decline.

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