The dollar rose on Wednesday after a report showed U.S. producer prices rebounded in August and as traders turned their focus to consumer inflation data due on Thursday that will be closely watched by the U.S. Federal Reserve as it considers when to next raise interest rates.
The index rose after the U.S. Labor Department said its producer price index for final demand increased 0.2 percent in August after slipping 0.1 percent in July. The rebound was driven by a surge in the cost of gasoline.
While domestic producer prices rose less than forecast, “the rebound does suggest that the U.S. economy retains underlying momentum”.
The overall demand picture is quite strong and prices are beginning to respond to an increases in demand in the real economy.
Inflation is being closely watched for clues on the timing of the next interest rate increase.
The dollar, which rallied to its strongest levels in a decade and a half at the start of 2017, has faltered since on the view that the pro-growth, pro-inflation policies promised by U.S. President Donald Trump had not materialized, as well as a pushing back of Fed rate hike expectations.
bonus: Broadening Descending Wedge
https://www.google.com/search?rlz=1C1CHZL_viVN759VN759&biw=1536&bih=686&tbm=isch&sa=1&q=wedge+pattern+forex&oq=wedge+pattern+forex&gs_l=psy-ab.3..0.201529.204604.0.205205.7.6.1.0.0.0.199.685.0j4.4.0....0...1.1.64.psy-ab..2.4.538...0i7i30k1.IbXvnYq-CAc#imgdii=P1pn9efasEsOPM:&imgrc=hsyv2ho3zcL_4M:
The index rose after the U.S. Labor Department said its producer price index for final demand increased 0.2 percent in August after slipping 0.1 percent in July. The rebound was driven by a surge in the cost of gasoline.
While domestic producer prices rose less than forecast, “the rebound does suggest that the U.S. economy retains underlying momentum”.
The overall demand picture is quite strong and prices are beginning to respond to an increases in demand in the real economy.
Inflation is being closely watched for clues on the timing of the next interest rate increase.
The dollar, which rallied to its strongest levels in a decade and a half at the start of 2017, has faltered since on the view that the pro-growth, pro-inflation policies promised by U.S. President Donald Trump had not materialized, as well as a pushing back of Fed rate hike expectations.
bonus: Broadening Descending Wedge
https://www.google.com/search?rlz=1C1CHZL_viVN759VN759&biw=1536&bih=686&tbm=isch&sa=1&q=wedge+pattern+forex&oq=wedge+pattern+forex&gs_l=psy-ab.3..0.201529.204604.0.205205.7.6.1.0.0.0.199.685.0j4.4.0....0...1.1.64.psy-ab..2.4.538...0i7i30k1.IbXvnYq-CAc#imgdii=P1pn9efasEsOPM:&imgrc=hsyv2ho3zcL_4M:
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N.KOREA IS SAID TO SHOW SIGNS OF MISSILE LAUNCH PREP: NIKKEI
N.KOREA IS SAID TO SHOW SIGNS OF MISSILE LAUNCH PREP: NIKKEI
August US CPI 1.9% y/y vs 1.8% y/y expected
Prior was 1.7% y/y
Ex-food and energy 1.7% vs 1.6% exp
Prior ex-food and energy +1.7%
Avg weekly earnings +0.9% y/y vs +1.1% prior
Avg hourly earnings +0.6% vs +0.7% prior
Month-over-month data:
CPI 0.4% vs +0.3% exp
Prior 0.1%
Ex food and energy 0.2% vs +0.2% exp
Prior ex food and energy +0.1%
Do you like inflation or wages? The dollar likes the inflation numbers and is at the best levels of the day. USD/JPY touched off 111.00.
There was a big jump in gasoline (+6%) so that should take a bit of the excitement out of the headline number. Core was strong as well, so it's not just Harvey.
The way the market has been this week, there is no questioning good US economic news, so it's going to be tough to stall the dollar.