U.S. Dollar Lower As Soft PPI Data Boosts Rate Cut Hopes
August 13 2024 - 9:16AM
RTTF2
The U.S. dollar weakened against its major counterparts in the
New York session on Tuesday, as producer prices rose less than
expected in July, strengthening expectations that the Federal
Reserve is likely to cut interest rates by 50 basis points in
September.
Data from the Labor Department showed that the producer price
index for final demand inched up by 0.1 percent in July after
rising by 0.2 percent in June. PPI was expected to rise by 0.2
percent.
Meanwhile, the report said the annual rate of producer price
growth slowed to 2.2 percent in July from an upwardly revised 2.7
percent in June.
Economists had expected the annual rate of producer price growth
to decelerate to 2.3 percent from the 2.6 percent originally
reported for the previous month.
Soft PPI data raised the odds of a 50 basis point rate cut at
the Fed's meeting on September 17-18.
Investors await Wednesday's CPI data and Thursday's retail sales
data to assess the outlook for monetary policy.
The greenback fell to a 1-week low of 1.0962 against the euro
and near a 2-week low of 1.2837 against the pound, off its early
highs of 1.0913 and 1.2756, respectively. The currency may locate
support around 1.12 against the euro and 1.31 against the
pound.
The greenback declined to a 3-week low of 0.6618 against the
aussie and near a 4week low of 0.6064 against the kiwi, from its
early highs of 0.6579 and 0.6017, respectively. The currency is
seen finding support around 0.68 against the aussie and 0.63
against the kiwi.
The greenback edged down to 146.79 against the yen and 0.8641
against the franc, reversing from its early highs of 147.94 and
0.8679, respectively. The currency is poised to challenge support
around 142.00 against the yen and 0.85 against the franc.
The greenback reached as low as 1.3719 against the loonie. If
the currency falls further, it is likely to test support around the
1.33 region.
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