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14 March 2024 | FXGT.com
US Dollar strengthens following the release of PPI data & Retail Sales.
- USD Responds Positively Post-Data Release: The US Dollar found strength and traded positively after the release of US Retail Sales for February and Producer Price data, with the US Dollar Index (DXY) challenging the 103 level. The latest news has caused traders to reconsider the timing of an anticipated initial rate cut by the US Federal Reserve.
- US Producer Inflation Increases: In February, producer inflation in the US saw a year-on-year rise to 1.6%, marking an acceleration from January’s 1% increase. This exceeded market expectations of a 1.1% rise.
- Monthly Core PPI Surpasses Estimates: On a month-on-month basis, the core PPI experienced a 0.3% uptick, surpassing the predicted 0.2% rise.
- US Retail Sales Below Expectations: Retail Sales growth in the US for February was reported at a 0.6% increase, which did not meet market expectations, particularly noted was a significant demand for automobiles. When excluding auto sales, retail sales increased by 0.3%.
- US Jobless Claims Slightly Decline: In the week ending March 9, initial jobless claims in the US saw a minor reduction by 1,000, totalling 209,000, below market expectations which predicted 218,000.
- Upcoming Economic Indicators: Traders are now looking forward to Friday’s release of Industrial Production and University of Michigan sentiment numbers.
- Federal Reserve’s Interest Rate Decision: Next week holds significant interest for the US Dollar, with the Federal Reserve’s interest rate decision being a focal point. Market participants will closely monitor for any indications regarding the future direction of monetary policy.
- The Importance of the New Dot Plot: Alongside the interest rate decision, the release of the new dot plot will be crucial. This document provides projections for future interest rates and will be scrutinized for any changes from the last update in December, which suggested up to three rate cuts could occur within the year.
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