Weekly Roundup: US dollar undermined by weak PPI figures

Amy Richards November 21st 2022 - < 1 minute read

The US dollar plummeted to new multi-month lows in the first half of last week.

This USD selloff was triggered by the publication of the latest US PPI release. October’s index fed into speculation that US inflation has peaked, which led USD investors to further scale back their expectations for future Federal Reserve rate hike bets.

However, the US dollar was quick to find its feet again, after geopolitical tensions rose sharply following a missile strike in Poland.

Coupled with a positive US retail sales print, this allowed the ‘greenback’ to strengthen through the middle of the week.

However the US dollar then closed the session on a sour note as a renewed market risk appetite and falling US Treasury yields weighed on the currency.

Concerns over fresh Covid lockdowns in China is helping the US dollar to get off to a strong start this week.

The ‘greenback’ may be able to build on these gains later in the week if the minutes from the Fed’s November policy meeting indicate there is still appetite within the bank for another 75bps rate hike next month.

Written by
Amy Richards

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