US Dollar Struggle Despite In Line PPI Figures
US Dollar Struggle Despite In Line PPI Figures
- US dollar retreats against the Euro and the Japanese yen, as the market awaits a pullback.
- US Producer Price Index was unchanged in August whereas some investors were looking for a 0.1% gain.
- US Producer Price Index ex Food & energy registered a gain of 0.1% in August, down from 0.2%.
- EURUSD pair trading higher intraday, but the Euro bulls struggle to break the all-important 1.2980 level.
US Producer Price Index
About an hour ago, the US Producer Price Index was released by the Bureau of Labor statistics, Department of Labor. A few analysts were expecting no change in the US PPI in August 2014 compared to the previous month of the same year, and a few were expecting a 0.1% gain. However, the outcome was a touch mixed, as the US PPI was unchanged in August in the seasonally adjusted terms. When we consider year-over-year change, then the US PPI came in at 1.8%, as expected by the market.
The outcome was more in line with the expectations, but the market was waiting for a surprise gain to some extent. So, that was one of the reasons why the US dollar was seen trading a touch lower after the release. Moreover, the US core PPI registered an increase of 0.1%, down from 0.2% in July 2014. The report added that when we consider the unadjusted basis, then the index for final demand increased 1.8% for the 12 months ended in August.
There was hardly any major reaction from the EURUSD pair. The pair was confined within a range after the release. However, the momentum looks to be on the higher side, which means the Euro bulls might make an attempt to push the shared currency higher in the near term. However, as mentioned in one of the recent analyses the 1.2980 level is a major hurdle for the pair. Only a break and close above the same might call for more gains, else there is a chance of one more dip towards the 1.2900 support area.
UK CPI Data
There was one major release lined up during the London session today. The UK Consumer Price Index was released by the National Statistics. The report published states that the UK annual inflation climbed 1.5% in August 2014, following a 1.6% rise registered in July 2014. If we consider the monthly change, then the UK Consumer Price Index jumped by 0.4%, up from the previous decline of 0.3%. So, the outcome was on the positive side of the British pound, and as a result the GBPUSD pair managed to survive a move lower after the release.
The GBPUSD traded lower earlier today, and was down from the intraday high of 1.6249. The pair traded as low as 1.6161, but later managed to find a few buyers which protected further downside in the pair. However, the pair broke a critical support area around the 1.6210-20 levels which might act as a resistance zone for the pair moving ahead.
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UK Nationwide Housing Prices highlighting the value of the houses prices in UK and indicate current movements in the housing market posted an increase of 1% in April, compared to the preceding month.
US dollar continued to weaken against a few currencies and managed to recover some ground against currencies like the Euro and the British Pound
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