USD breaking news: Positive PPI print despite weak job data. The headline and core US PPI inflation rates both showed an encouraging reduction.

PPI DATA SHOWS SLOWING PRICE PRESSURES

The headline and core US PPI inflation rates both showed an encouraging decrease. The year-over-year reading for April showed a 2.3% growth. Below the prior month’s 2.7% gain and below estimates of 2.5%. Similar to the previous 3.4%, Core PPI came in at 3.2%, an underestimate which is of 3.3% in the prior

PPI increased by 0.2% in April on a month-over-month basis contrasted to a 0.5% fall in March. As well as predictions of a 0.3% increase.  Indicating that although the general trend of travel is still positive, prices are not exhibiting much desire to decline.

PPI Data Print

The release of PPI data and worrying jobs data cause the USD to decline.

Initial jobless claims increased to levels last seen in 2021. However, it is not possible to pinpoint the specific reason why the dollar dipped following the release of the data. A worse jobs market suggests the Fed could alter its stance and think twice about continuing to raise rates in future periods. Which is normally bad news for the currency – However, it seems the Fed is delaying raises at the current rate in light of new evidence. This simply highlights how important future inflation prints will be.

Despite advancements in the headline measure, Underlying Inflation continues to pose a concern

PPI helps to supplement the consumer pricing index (CPI). Which often elicits a stronger market reaction and is the primary inflation indicator used by the market. Headline inflation came in at 4.9%, adding to the sharp decrease of 1% from the prior month. This shows a refusal to go down as opposed to the headline figure seen

The Fed intends to maintain high-interest rates for a longer period of time if price hikes continue. Which will be detrimental to the economy given the ongoing problems with regional banks and the US debt ceiling.