U.S. Dollar Dips, Bitcoin Nears Record High as July Inflation Cools; Fed Rate Cut Hopes Rise

U.S. Dollar Dips, Bitcoin Nears Record High as July Inflation Cools; Fed Rate Cut Hopes Rise

August 13, 2025

The U.S. dollar lost strength on Tuesday after new data showed America's consumer prices grew only moderately in July. This calm rise leaves the door open for the Federal Reserve to cut interest rates next month, a move traders are eagerly watching. Cryptocurrency bitcoin was steady around $119,295, zooming close to its all-time high of $123,153.22 recorded in mid-July. The Labor Department's Bureau of Labor Statistics revealed the consumer price index (CPI) climbed 0.2% in July, a bit slower than June's 0.3% increase. Over the year through July, the CPI went up 2.7%, steady from June’s number. Experts had expected a tiny rise of 0.2% monthly and 2.8% yearly, so the data slightly beat expectations. Currency markets had been calm, but this moderate inflation figure boosted hopes for a Federal Reserve rate cut next month. Interest rate cut chances surged especially after last week’s soft job numbers. The euro wiped out earlier losses and climbed 0.4% against the dollar to $1.16663. Meanwhile, the greenback slid 0.3% versus the Japanese yen, trading near 147.74 yen. Bullard, speaking to CNBC, said he would take a Federal Reserve role "if we can protect the value of the dollar ... that'll give us lower interest rates over time; if we aim for low and stable inflation, (and) respect the independence of the institution under the Federal Reserve Act." His words highlight a careful approach balancing rate cuts and stable inflation. Across the Atlantic, the British pound gained 0.5% against the dollar, trading at $1.3495. New data showed the UK’s job market weakened but at a slower pace, with wage growth remaining strong. This explains why the Bank of England is cautious about cutting rates—after all, it just lowered them last week by a close 5-4 vote. Down under, the Australian dollar dipped initially after the Reserve Bank of Australia cut rates by a quarter point, a widely expected move. The bank noted a slowdown in inflation and a softer labor market but was careful about future rate decisions. Despite the cut, the Aussie bounced back to trade up 0.3% at $0.653 against the U.S. dollar. Markets mostly ignored President Trump's decision to extend the pause on higher tariffs on Chinese imports for another 90 days, as this had been expected. FAQs Q1. Which is most popular cryptocurrency? A1. The most popular cryptocurrency is Bitcoin. Q2. How is Bitcoin performing? A2. Bitcoin stayed flat around $119,295 after reaching $122,308.25 on Monday, nearing its mid-July record of $123,153.22.

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Tags: Us dollar, Federal reserve, Consumer price index, Bitcoin, Currency markets, Interest rates,

Erasmo Fetzer

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