The direction of the dollar exchange rate was confused this week. The market is nervous ahead of the ECB and the Bank of England’s monetary policy announcement event, including the US FOMC next week, and it is difficult to see one-way price movements.
Under such circumstances, the November rice producer price index will be announced today. Next week’s consumer price index will be the most watched U.S. inflation data for November, but this time the producer price index will be released first. It seems that interest is increasing as a material that quickly indicates the direction of the dollar exchange rate in the future.
The market forecast is +0.2% month-on-month, +0.2% core month-on-month, +7.2% year-on-year, and core +5.9% year-on-year. The key point is the degree of downward trend compared to the previous year. It is assumed that the dollar will be sold if growth is lower than expected, and that the dollar will be bought if the decline is not as expected. However, the 50 basis point rate hike at the next FOMC meeting will not undermine its advantage unless it is an extreme result that surpasses the previous rate. With the weekend just around the corner, there is a possibility of a nervous swing back, so watch out for market fluctuations.
It is assumed that the current market, which is sensitive to inflation, may react sensitively to the US November Producer Price Index (PPI).
Pay attention to the flow of the US dollar after this.