April US PPI jumps to 6.0% YoY, exceeding forecasts and reinforcing expectations for prolonged Fed tightening.
The Euro slid against the US Dollar on Wednesday, with EUR/USD dropping 0.25% to 1.1710 as stronger-than-expected US inflation data bolstered the Greenback. Rising oil prices and supply disruptions in the Middle East added to inflationary pressures.
US Producer Price Index inflation surged to 6.0% YoY in April, up from 4.3% in March and above the 4.9% consensus. Core PPI, excluding food and energy, climbed to 5.2% YoY from 4.0%, also surpassing expectations. The data followed Tuesday’s CPI report, which showed headline inflation accelerating to 3.8% YoY, the highest since May 2023.
Markets now see a higher probability of a Federal Reserve rate hike later this year, though no immediate change is expected. The FedWatch tool reflects growing bets on tighter policy as inflation remains well above the central bank’s 2% target.