Higher September Producer Inflation Not Helping the Dollar

Today trading has been quiet overall, with the main currencies seeing minimal movement in relation to the US dollar. The ranges for the day are likewise somewhat limited. With the exception of some little pressure on the Australian and New Zealand currencies, as well as on the USD after the producer price index report for September, which was released just a while ago, the others are remaining relatively flat.

This occurs at the same time as stocks are also gaining more traction for the day, as S&P 500 futures are already up 0.3%. French and luxury companies are still behind after LVMH announced a weaker increase in sales in Q3, although European indexes have tipped slightly higher.

The USD retreated against the Euro and the GBP, although it is higher against most other assets. The PPI producer inflation showed an increase in September, as Oil prices kept moving higher with efforts from Saudi Arabia, although the USD is not benefiting from it.

September Producer Price Index Report

• September PPI YoY +2.2% vs +1.6% expected
• Prior PPI YoY was +1.6% (revised to +2.0%)
• PPI MiM +0.5% vs +0.3% expected
• Core PPI YoY Ex food/energy +2.7% vs +2.3% expected
• Core PPI MoM Ex food/energy +0.2% vs +0.3% prior (revised to +0.2%)

The US dollar rose around 20 pips on the headlines but has quickly retraced. Similarly, US 10-year yields rose 2 bps only to give it back.

Here are thoughts from BMO: