DOLLAR INDEX ON BACK FOOT AMID SOFT US PPI DATA; ALL EYES ON INFLATION NUMBERS

Published on Jan 15, 2025 15:18

The dollar index is trading slightly on the back foot on Wednesday as US PPI data came in softer-than-expected sparking fresh possibility for Fed to cut rates. Data published on Tuesday showed that the US annual PPI rose 3.3% in December, missing the expected 3.4% growth, while the core PPI inflation rose to 3.5% in the same period, compared to the estimates of 3.8%. Nevertheless, higher US treasury yields are limiting any sharp drop in greenback. Investors are all eyes upon the release of the all-important US Consumer Price Index (CPI) data for December, which is expected to provide fresh insights on the US Federal Reserve�s (Fed) interest rates trajectory. Currently, DXY that measures the greenback against a basket of currencies is seen quoting at 108.90, down 0.20% on the day and off recent fresh two-year peaks. Among basket currencies, EURUSD and GBPUSD are both rebounding amidst dollar weakness and trading slightly higher by 0.1% at $1.0337 and $1.2213 respectively.