The producer price index (PPI) for final demand in the United States rose 0.8% in November, reported the Department of Labor. A Reuters poll of analysts had expected the figure to rise 0.5% in November.
The data consolidated the expectation that the Fed will announce an accelerated reduction of its stimulus, what would allow finalize the bond purchase in March and proceed with a rate hike.
Mizuho’s senior economist Colin Asher hopes that the dollar benefits from the Fed’s more aggressive policy stance vis-à-vis other central banks, as traders have reactivated long dollar positions that were undone after the discovery of the Omicron variant, lowering expectations of a rate hike in the United States.
“For a few days after the omicron came on, the worst performing currencies were commodities and global growth-focused currencies. Now that trend has reversed somewhat. The dollar should hold firm until markets pick up. convince us that US inflation has peaked “, Asher said.
The dollar index, which measures the performance of the currency against six pairs, it fell 0.15% to 96,211 units after rising earlier to 96,493 units, a peak since December 7.
The two-day meeting of the Federal Reserve, which begins Tuesday, leads a series of meetings of central banks that will announce their monetary policy decisions this week, including the European Central Bank, the Bank of England and the Swiss National Bank on Thursday. and the Bank of Japan on Friday.
The euro was firming 0.2% at $ 1.1309, after hitting a one-week low of $ 1.12605 during the Asian session. Germany’s Ifo institute forecast on Tuesday that the German economy will contract 0.5% quarter-on-quarter in the last three months of this year and stagnate in the first three months of next year.
The dollar was barely trading at 113,520 yen while the British pound was up 0.3%.
Source From: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
