US producer inflation hits a 4-year high, lifting Treasury yields and the Dollar, while UK political turmoil pressures Sterling.
The British Pound fell 0.19% against the US Dollar, extending losses for a second day as US producer inflation surged to 6% year-over-year, its highest level in four years. Core PPI, excluding volatile items, rose 5.2%, surpassing estimates of 4.3% and March’s 4% print.
The data reinforced expectations that the Federal Reserve will maintain higher interest rates for longer, pushing the 10-year Treasury yield up 2.5 basis points to 4.488%. The US Dollar Index (DXY) climbed 0.21% to 98.49, reflecting broad Greenback strength amid elevated energy prices and stalled US-Iran negotiations.
In the UK, political uncertainty added pressure on Sterling after Labour MPs moved to oust Prime Minister Keir Starmer following local election losses. GBP/USD traded at 1.3513, down from a session high of 1.3551.