Dollar increased, suggesting that inflationary pressures have persisted and that the Federal Reserve may decide to keep interest rates higher for longer. The dollar increased 0. 35 percent to 137.05 Japanese yen. Pound dropped 0.31% to $1.2229 while the Australian dollar dipped 0.34% to $0.6773. Similarly, the kiwi fell 0.34% to $0.6393.
The U.S. producer price index for final demand in November increased 0. 3% from October and 7.4% in 2021, slightly exceeding expectations for increases of 0.2% and 7.2%, respectively.
Additionally, the European Central Bank (ECB) and the Bank of England will meet and each is likewise expected to deliver a 50 bp rate hike. “Ahead of the FOMC meeting, November’s U.S. inflation figures are due, with economists expecting core annual inflation of 6.1%.
“The market reaction to U.S. inflation surprises has been asymmetric so far in 2022, with downside surprises having a larger effect than upside ones,” said analysts at Barclays.
Reuters