US DOLLAR DRIFTS HIGHER AFTER PRODUCER PRICES DATA
The U.S. dollar saw a slight uptick on Friday, supported by data revealing higher-than-expected producer prices in the country. This reinforced expectations that the Federal Reserve might delay the start of its interest rate-cutting cycle until at least the middle of the year, if not later. Although the U.S. currency initially gained more ground following the release of the producer price index (PPI) data, it has since softened as traders prepare for a long holiday weekend.
The Producer Price Index (PPI) rose by 0.3% in January, surpassing expectations of a 0.1% increase. Year-on-year, the PPI climbed by 0.9%, exceeding forecasts of a 0.6% rise. These stronger-than-expected figures, coupled with a robust Consumer Price Index (CPI) report last month, suggest that the Federal Reserve may not be eager to cut interest rates anytime soon. As a result, the dollar index, which measures the dollar against a basket of major currencies, is poised for its fifth consecutive week of gains. It is currently up 0.1% at 104.32 and has risen by 0.2% for the week.
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