Dollar Rallies with US Yields After Hot PPI Data
A Bloomberg gauge of the dollar rose alongside Treasury yields after the release of US wholesale inflation figures showed producer prices accelerating by the most in three years, leading traders to dial back bets on Federal Reserve easing next month.
The Bloomberg Dollar Spot Index gains 0.3%, on track to rise for first session in three.
US PPI final demand in July rose 0.9% MoM (0.2% expected); core PPI also surged 0.9% (0.2% forecast).
“Tariffs are causing businesses to raise the prices they charge each other, which will show up in higher consumer prices over time,” wrote Bill Adams, Comerica Bank’s chief economist.
“The report is another pebble on the scale against a rate cut at the Fed’s September meeting. However, upcoming jobs data will weigh more heavily on the Fed’s next decision than this inflation report,” Adams added.
The yen reverses gains after PPI report; earlier, rallied after Treasury Secretary Scott Bessent called for both a lower US cash rate and a higher Japanese one, saying the Bank of Japan is “behind the curve” in addressing inflation.
USD/JPY steady at 147.41 after earlier reaching weakest since July 24.
EUR/USD slips 0.4% to 1.1663, on track to fall for first session in three.
Near-term resistance seen around August high of 1.1730 set Wednesday.
GBP/USD reverses gains, falls 0.2% to 1.3553; earlier, rose to one-month high at 1.3595.
Data showed the UK economy fared better than expected in the second quarter, recording the fastest growth of the Group-of-Seven nations during the first half of the year.
Source: Bloomberg
