It falls under the weight of PPI – DBS inflation

US PPI inflation depreciated the dollar index (DXY) by 0.5% to 102.62. At the time of writing, DXY is trading at 102.47, notes DBS FX analyst Philip Wee.

PPI inflation steady at 0% monthly in July

“Weaker-than-expected US PPI inflation depreciated the Dollar Index (DXY) by 0.5% to 102.62, close to the August 5 close of 102.69. 0.2% since June.”

“Excluding food and energy prices, core PPI inflation was steady at 0% in July, less than the consensus of 0.2%, while June was revised up to 0.3% from 0.4 %. The US Treasury yield fell in the second session by 8.8 bps to 3.93%, while the 10-year yield fell less by 6.1 bps to 3.84%.

“The futures market had a 159% chance that the Fed would cut interest rates by 50bps to 4.75-5.00% at its September 18 FOMC meeting.”