He global dollar fell after the unexpected increase in production prices in USA in April, amid sharp increases in the costs of goods and services, indicating that the inflation remains stubbornly high at the beginning of the second quarter.
A report of the work Department also showed that wholesale goods prices rose solidly last month, although the cost of food fell. Thus, after the report, operators reduced their expectations that the Federal Reserve (Fed) cut interest rates in September.
He dollar index, a measure of the US currency against six major currencies, fell 0.02% to 104.99, while the euro rose 0.28% to $1.0820.
The index of production prices for final demand rose 0.5% in April, after falling 0.1% in March, the Department of Labor’s Bureau of Labor Statistics said.
Economists polled by Reuters had forecast the PPI would rise 0.3%, following a 0.2% rise in March. In the 12 months through April, the PPI rose 2.2%, as expected, after rising 1.8% in March.
The expectation for inflation data
PPI data, which can be volatile, is released one day before the Consumer price index (CPI) for April, a more important figure that should provide a clearer idea of how quickly the Federal Reserve could cut the interest rates.
A single piece of data will not be enough to convince monetary policymakers that the pace of inflation is slowing, according to Tierry Wizman, global rates and currencies strategist at Macquarie in New York.
Wednesday’s report on core consumer prices is expected to show that the CPI rose 0.3% month-on-month in April, or less than 0.4% the previous month, according to a Reuters poll.
Source: Ambito
