US Dollar Rallies on Stable Inflation, Turkish Fears

The US dollar rallied against its major rivals today, though not against safe ones, like the Japanese yen and the Swiss franc. The reasons for the rally were the stable inflation figures and risk aversion on markets.
The US Consumer Price Index rose 0.2% in July, in line with expectations and a bit faster than in June (0.1%). The core components of the index were up 0.2% as well, same as in the previous month and also matching expectations.
But perhaps even more important was the mounting tension between the United States and Turkey, which rattled markets today. Market participants were concerned that US sanctions against the Middle Eastern nation can hurt the European banking system, which has a strong exposure to Turkish assets. As a result, safe currencies, like the dollar and the yen, were in demand during the current trading session.
EUR/USD dropped from 1.1526 to 1.1418 as of 15:23 GMT today, trading near the lowest level since July 2017. USD/CHF was little changed at 0.9938 following the rally to the daily high of 0.9975. USD/TRY jumped from 5.5421 to 6.4100, touching the new record high of 6.6962 intraday.

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