The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in June on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today.
Economists had forecast the CPI edging up 0.1% last month. Over the last 12 months, "headline" inflation rose 1.6 percent.
The home currency resumed a tad higher at 64.57 from weekend closing level of 64.60 at the Interbank Foreign Exchange (forex) market.
The New Zealand dollar was trading at 73.16 USA cents as at 5 pm from 72.84 cents late yesterday but was weaker versus last Friday in NY when it traded at 73.80. Platinum and palladium advanced 1.5% and 0.6%, respectively.
Traders trimmed expectations of a rate hike by the end of the year, with dollar interest rate futures pricing in about a 55 per cent chance compared to about 60 per cent earlier, while most investors expect the Fed to decide to start shrinking its balance sheet in September.
Industrial production rose for the fifth straight month in June, increasing 0.4 per cent on a continued rise in oil and gas drilling and coal mining.
The Canadian dollar remained near its strongest in over a year after the Bank of Canada this week raised interest rates for the first time since 2010, with further tightening expected this year.
UK's benchmark FTSE 100 closed down by 0.7 percent, the pan-European FTSEurofirst 300 ended the day down by 0.01 percent, Germany's Dax ended down by 0.2 percent, France's CAC finished the day down by 0.1 percent. The S&P 500 .SPX gained 11.44 points, or 0.47 percent, to 2,459.27 and the Nasdaq Composite .IXIC added 38.03 points, or 0.61 percent, to 6,312.47.
Mr Clarke said he believes CPI will exceed consensus estimates, having reached 3% in June, forcing the Bank's governor, Mark Carney, to write an official letter to the Chancellor explaining why inflation has surpassed its target by 1%.
"This cements the weaker trend in the dollar and lower US yields and I think this story has got legs", he said.
The yield on the 10-year note fell five basis points to 2.298% after earlier dropping as low as 2.75%. It earlier fell to 2.279 percent, its lowest since June 30. The drop came after the lacklustre U.S. data raised doubts about United States economic growth and whether the Fed will hike rates again this year. The 10-year German Bund ticked up nearly one basis point to yield 0.525 per cent.
Spot gold gained 0.96 pct at $1,228.61 per ounce by 3:01 p.m. EDT (1901 GMT) after hitting $1,232.76.
Brent crude futures LCOc1 , the worldwide benchmark for oil, settled up 49 cents at $48.91 per barrel.
The FTSE 100 .FTSE fell 0.5 percent, underperforming mid-caps .FTMC and taking weekly gains to a narrow 0.2 percent.
Oil rose 1 percent on Friday, boosted by lower US stockpiles, a slight slowdown in USA crude production and signs of increased Chinese demand, but trading was volatile as global supply remained strong.
Brent crude futures, the global benchmark for oil, were up 31 cents at $48.73 per barrel.