US dollar retreats amid cooler producer price inflation
Philip McHugh January 15th 2025 - 2 minute read

Pound (GBP) softens amid tax hike fears
The pound (GBP) weakened during yesterday’s session, despite UK bond markets remaining relatively calm.
Although the recent turmoil seemed to have subsided, worries about further spending cuts and tax hikes in the UK continued to apply pressure to the pound.
This morning, the UK’s latest consumer price index showed that inflation unexpectedly eased in December. This has helped to calm fears about soaring borrowing costs in the UK, although increased interest rate cut bets are capping GBP’s upside potential.
Euro (EUR) buoyed by USD pullback
The euro (EUR) enjoyed modest support yesterday thanks to its negative correlation with the US dollar (USD), which had retreated from recent highs.
However, a lack of Eurozone data and an improvement in risk appetite both limited the single currency.
Today, Germany’s full-year GDP growth rate for 2024 is out. If the data reports that the Eurozone’s largest economy contracted last year, EUR may face selling pressure.
US dollar (USD) weakens as PPI misses forecasts
The US dollar initially firmed during yesterday’s European session, attempting to recoup overnight losses, thanks to an uptick in US Treasury yields.
However, the ‘greenback’ came under pressure in the afternoon due to cooler-than-forecast producer price inflation in December.
Looking forward, the latest US CPI is the focus for USD investors. Could an uptick in inflation see the US dollar test new highs this afternoon?
Canadian dollar (CAD) subdued as oil prices soften
The crude-linked Canadian dollar (CAD) weakened against its stronger peers yesterday, but held steady elsewhere, as a slight decline in oil prices pressured the currency.
Canadian data remains absent from the calendar today, potentially leaving the ‘loonie’ to trade on oil price dynamics.
Australian dollar (AUD) flat due to quiet trade
The Australian dollar (AUD) traded in a narrow range overnight as a mixed market mood and lack of Australian data muted the currency.
New Zealand dollar (NZD) muted amid mixed mood
Likewise, the New Zealand dollar (NZD) was mostly rangebound overnight amid an absence of data and an uncertain market mood.
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Written by
Philip McHugh