The US dollar index (DXY) saw modest gains after the latest producer price index (PPI) and retail sales figures were published.
The report showed that October headline PPI numbers on a month-over-month and year-over-year basis came in below expectations. The ex-food and energy readings on a month-over-month and year-over-year basis were also cooler than forecast.
October retail sales month-over-month were slightly negative, but not as bad as anticipated. The ex-autos reading also exceeded estimates.
The new data adds to signs that inflationary pressures may be easing in the US economy. Investors have now priced out any chance of a Fed rate hike in December, while bets for a rate cut by May 2023 have risen to around 50%, according to the CME Group’s FedWatch tool.
The dollar’s fortunes will likely continue to sway based on shifting rate hike expectations going forward.
