* U.S. produce prices rise modestly
* Futures market sees U.S. rate cut in July
* Euro slightly lower after comments from ECB official
* Fed's Evans says rate cuts needed to lift inflation
* Graphic: World FX rates in 2019
(Adds new comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, July 12 (Reuters) - The dollar weakened for a third
straight session on Friday, still pressured by expectations the
Federal Reserve will start cutting interest rates at a monetary policy
meeting later this month.
Against a basket of other currencies , the dollar fell 0.1% to
97.004, posting its worst daily loss against the yen and Swiss franc
in more than three weeks.
The dollar briefly trimmed losses after U.S. data showed producer
prices rose slightly in June, up 0.1% following a similar gain in May.
In the 12 months through June, the PPI rose 1.7%, the smallest gain
since January 2017.
Joe Manimbo, senior market analyst, at Western Union Business
Solutions in New York said the PPI increase should not shake U.S. rate
Until the Fed's preferred gauge of inflation, the core personal
consumption expenditures price (PCE) index, shows convincing signs of
heating up from a low 1.6%, the Fed is unlikely to change its stance
on cutting rates this month, he added.
The producer prices data followed a report on Thursday showing the
core U.S. consumer price index, excluding food and energy, rose 0.3%
in June, the largest increase since January 2018.
The CPI reading pushed U.S. Treasury yields higher, but money
markets still indicated one rate cut at the end of July and a
cumulative 64 basis points in cuts by the end of 2019, especially
after Fed Chairman Jerome Powell flagged such a move in his two-day
testimony before Congress this week.
That should be dollar-negative in general, analysts said.
But Jane Foley, head of FX strategy at Rabobank in London,
believes dollar weakness will not be as severe as many anticipated
because other major central banks are easing as well.
"The dovish stances of most other G10 central banks is
offsetting the impact of potential Fed action on the U.S. dollar
crosses," Foley said, noting, for instance, that she expects the
European Central Bank to cut its discount rate further into negative
territory at its September meeting.
The euro, as a result, has been on a downtrend since the
beginning of the year, down 1.7%.
However, the single currency on Friday rose 0.2% versus the
dollar to $1.1271 , after earlier slipping following comments from
ECB Governing Council member Ignazio Visco saying the bank will need
to adopt further expansionary measures if the euro zone economy does
not pick up. He said the ECB will consider its options "in the
The market has also been monitoring Fed speakers. Chicago Fed
President Charles Evans on Friday said the U.S. economy still has
"very solid fundamentals" with a vibrant labor market. He
said he viewed the Fed's monetary policy as neutral, but it could be
more accommodative if the goal is to lift inflation.
Currency bid prices at 3:25PM (1925 GMT)
Description RIC Last U.S. Close Pct Change
YTD Pct High Bid Low Bid
Euro/Dollar EUR= $1.1271 $1.1252 +0.17%
-1.73% +1.1275 +1.1239
Dollar/Yen JPY= 107.8100 108.4800 -0.62%
-2.22% +108.6000 +107.8100
Euro/Yen EURJPY= 121.54 122.09 -0.45%
-3.71% +122.2300 +121.5200
Dollar/Swiss CHF= 0.9841 0.9900 -0.60%
+0.28% +0.9908 +0.9837
Sterling/Dollar GBP= 1.2571 1.2519 +0.42%
-1.46% +1.2575 +1.2519
Dollar/Canadian CAD= 1.3032 1.3072 -0.31%
-4.44% +1.3078 +1.3018
Australian/Doll AUD= 0.7021 0.6973 +0.69%
-0.40% +0.7025 +0.6971
Euro/Swiss EURCHF= 1.1093 1.1141 -0.43%
-1.43% +1.1154 +1.1073
Euro/Sterling EURGBP= 0.8965 0.8988 -0.26%
-0.21% +0.8991 +0.8956
NZ NZD= 0.6694 0.6659 +0.53%
-0.34% +0.6698 +0.6659
Dollar/Norway NOK= 8.5388 8.5386 +0.00%
-1.16% +8.5583 +8.5199
Euro/Norway EURNOK= 9.6257 9.6115 +0.15%
-2.83% +9.6264 +9.6054
Dollar/Sweden SEK= 9.3704 9.3805 +0.08%
+4.54% +9.3910 +9.3603
Euro/Sweden EURSEK= 10.5644 10.5562 +0.08%
+2.93% +10.5651 +10.5399
real interest rates and DXY
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Saikat Chatterjee in London; Editing by David Gregorio and Jonathan Oatis)
((firstname.lastname@example.org; 646-223-6322; Reuters