April US Producer Price Index rose 1.4% month-over-month, exceeding forecasts and fueling Fed rate-hike concerns.
The US Dollar Index climbed to 98.50, its highest level since late April, after April’s Producer Price Index jumped 1.4% month-over-month, well above the 0.5% consensus. Core PPI also rose 1.0%, reinforcing fears of persistent inflation and potential prolonged Federal Reserve tightening.
Earlier expectations had centered on a softer print, with markets pricing in gradual rate cuts later this year. The stronger data sent US Treasury yields higher, weighing on risk assets and major currency pairs. EUR/USD fell toward 1.1710, while GBP/USD slid to 1.3520 amid broader USD strength.
The Dollar outperformed most peers, with the New Zealand Dollar seeing the largest decline. Traders now await April US Retail Sales and UK GDP data for further direction.