Here’s what you need to know on Thursday, May 14th.
The US Dollar Index (DXY) climbed toward the 98.50 mark, hitting its highest point since late April. This surge followed better-than-anticipated data from the US Producer Price Index (PPI). In April, the headline PPI increased by 1.4% month-over-month, surpassing the expected 0.5%. The core PPI also rose by 1.0%, adding to concerns that inflation might be on the rise, which could prompt the Federal Reserve to raise interest rates for a longer duration than previously thought.
The EUR/USD pair dipped to around the 1.1710 level, influenced by the broad strength of the US dollar and rising US yields. The euro is struggling to gain traction as traders reconsider Federal Reserve forecasts and pay attention to mixed signals from the euro zone.
Meanwhile, GBP/USD fell toward the 1.3520 area. This decline is driven by a robust greenback alongside renewed political and financial worries in the UK. Sterling appears unstable as investors grow cautious amid pressures on Chancellor Keir Starmer, increasing volatility in Gilt, and questions regarding the UK’s economic future.
USD/JPY saw an uptick to about 156.90, buoyed by rising US yields in response to hot inflation data. Despite a strong demand for safe-haven assets amid geopolitical uncertainties, the Japanese yen remains under pressure as yield differentials increasingly favor the US dollar.
As for AUD/USD, it’s sliding toward the 0.7250 range, with the stronger US dollar overshadowing support from commodity prices and risk-sensitive movements.
In commodity news, West Texas Intermediate (WTI) crude oil is trading at around $101.20 a barrel, bolstered by declining US crude inventories and ongoing supply worries linked to the Iran conflict and disruptions in the Strait of Hormuz. US crude inventories dropped by 4.3 million barrels, exceeding expectations.
Gold prices are also under pressure near $4,690, as increasing US yields and a stronger dollar dampen demand for non-yielding metals. Still, uncertainties regarding geopolitical affairs are keeping the price from dropping significantly.
Here’s what’s next on the docket:
Thursday, May 14th:
- Australian May consumer inflation expectations
- UK March GDP month-on-month change. UK Q1 GDP QoQ, QoQ. UK Q1 GDP YoY QoQ
- UK March industrial production month-on-month. UK manufacturing production m/m in March
- DE April HICP YoY
- Number of new unemployment insurance claims in the US
- U.S. April retail sales month-over-month. US April Retail Sales Management Group. U.S. April retail sales (automotive month change)
- New Zealand April Business New Zealand PMI
Friday, May 15th:
- April CPI EU standard year-over-year. FR April CPI YoY
- US May NY Empire State Manufacturing Business Index
- U.S. April industrial production m/m
