USD - United States Dollar
The US dollar modestly strengthened against a basket of currencies after data showed that US producers hiked their prices again in July. US jobless claims also dipped for a third straight week. The US Dollar Index was up 0.10%, trading at 93.01 at the time of writing.
The Producer Price Index (PPI) tracks what firms charge for their goods and services. Last month’s reading climbed 1%. On an annual basis, the PPI jumped to a record high of 7.8%. Analysts suggest that these producer prices could feed into higher costs in retail stores, where annual consumer price inflation remained at a 13-year high of 5.4% in July.
This pours water on the argument that inflation is still a concern in the US, and that the Federal Reserve needs to move to tighten their monetary policy to counteract the impact of inflation. What's uncertain is the timing behind when this will begin. Federal Reserve members are split over when the tapering should begin, with some citing an immediate start and others suggesting that the central bank should wait until October. This uncertainty could cause some volatility for the US dollar in the coming weeks.
The UK’s second quarter GDP figures came in at a strong 4.8%. On the other hand, industrial production and manufacturing production posted weaker than expected results, as did UK construction output. This has provided a mixed bag for sterling, which has generally strengthened overnight, especially against the euro, but the move has been relatively underwhelming. GBPUSD was down 0.20%, trading at 1.3838 at the time of writing.
June Industrial Production in the eurozone was down 0.3%, missing market expectations. EURUSD was down 0.09% at the time of writing.
The Canadian dollar edged lower against USD as concern about the spread of COVID-19’s Delta variant weighed on oil prices, a major Canadian export. USDCAD was up 0.03%, trading at 1.25061 at the time of writing.
1.1726 - 1.1752 ▼GBP/USD:
1.3831 - 1.3885 ▼AUD/USD:
0.7337 - 0.7387 ▼USD/CAD:
1.2492 - 1.2521 ▲