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The increase in the US producer price index fell back, and the US dollar index fell significantly on the 13th

2024-08-14

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As the data released in the morning of the same day showed that the US producer price index in July fell significantly and the market's expectations for the Fed's interest rate cut increased, the US dollar weakened against a basket of currencies on the 13th. The US dollar index consolidated in a narrow range in the overnight market and continued to fall on the same day. The US dollar index fell significantly at the end of the day.

The US dollar index, which measures the US dollar against six major currencies, fell 0.56% on the same day and closed at 102.559 at the end of the foreign exchange market.

The data released by the US Department of Labor in the morning of the 13th showed that the US terminal demand producer price index rose 0.1% month-on-month in July, while the market expected and June data to rise by 0.2%. The index rose 2.2% year-on-year in July, lower than the market expectation of 2.6%, and the year-on-year increase in June was revised from 2.6% to 2.7%.

Helen Given, a foreign exchange trader at foreign exchange broker Monex USA, said that overall, economic data showed that the Federal Reserve would not have any resistance to cutting interest rates by 25 basis points at least at the September monetary policy meeting.

Given said that since the Fed has shown that it does not like to shock the market, it is still not believed that the Fed will cut interest rates by 50 basis points at the September monetary policy meeting, but the possibility of the Fed cutting interest rates instead of keeping interest rates unchanged will make the US dollar show some weakness, especially when other central banks in the world consider keeping interest rates unchanged in the next monetary policy meeting cycle.

The data released by the FedWatch Tool of the Chicago Mercantile Exchange at 5:05 pm on the 13th showed that the probability of the Fed cutting interest rates by 50 basis points at the September interest rate meeting rose from 50% the previous day to 53.5%, and the probability of cutting interest rates by 25 basis points fell from 50% to 46.5%.

Erik Nelson, assistant vice president of investment at Wells Fargo Advisors, said that the dollar can be seen to be somewhat weak, and part of the problem is that the US consumer price index has not yet been released. The US core consumer price index is actually strong to some extent, which may also limit the weakness of the US dollar.

According to data released by the UK National Statistics Office earlier on the 13th, the unemployment rate in the UK was 4.2% in July, lower than the market expectation of 4.5%, and the data in June was revised from 4.4% to 4.5%. This data boosted the pound.

As of the end of the New York foreign exchange market, 1 euro was exchanged for 1.0999 US dollars, higher than 1.0930 US dollars on the previous trading day; 1 pound was exchanged for 1.2867 US dollars, higher than 1.2769 US dollars on the previous trading day.

One US dollar was exchanged for 146.68 Japanese yen, lower than 147.30 Japanese yen on the previous trading day; one US dollar was exchanged for 0.8640 Swiss francs, lower than 0.8653 Swiss francs on the previous trading day; one US dollar was exchanged for 1.3712 Canadian dollars, lower than 1.3735 Canadian dollars on the previous trading day; one US dollar was exchanged for 10.4530 Swedish kronor, lower than 10.5318 Swedish kronor on the previous trading day.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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The increase in the US producer price index fell back, and the US dollar index fell significantly on the 13th

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