Inflation in the United States, as measured by the Consumer Price Index (CPI), declined to 8.5% on a yearly basis in July from 9.1% in June, the data published by the US Bureau of Labor Statistics revealed on Wednesday. This reading came in lower than the market expectation of 8.7%.

The Core CPI, which excludes volatile food and energy prices, stayed unchanged at 5.9%, compared to analysts' forecast for an increase to 6.1%. On a monthly basis, core inflation rose by 0.3% following June's increase of 0.7%.

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Market reaction

With the initial market reaction, the greenback came under heavy pressure and the US Dollar Index was last seen losing 1% on the day at 105.22.