📈 U.S. PPI Scenarios and FX Impact
🔽 Below expectations (disinflationary signal)
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Stronger rate-cut expectations, accelerated dollar selling.
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USD/JPY: Risk of decline into the 146.30–146.20 zone.
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EUR/USD: Potential test above 1.1750.
➡️ In line with expectations (neutral outcome)
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Largely priced in, market reaction limited.
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USD/JPY: Range-bound around 147.00.
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EUR/USD: Sideways near 1.1700.
🔼 Above expectations (re-acceleration of inflation)
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Rate-cut bets pared back, short-term dollar buying strength.
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USD/JPY: Push higher toward 148.00.
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EUR/USD: Likely pullback toward 1.1650.
📊 Scenario Matrix: U.S. PPI Outcomes
| Scenario | USD/JPY | EUR/USD | Expected Market Reaction |
|---|---|---|---|
| Below expectations (disinflation) | Risk of drop into mid-146s | Potential breakout above 1.1750 | Stronger rate-cut expectations, USD selling, JPY and EUR buying |
| In line with forecasts | Stable around 147.00 | Sideways near 1.1700 | Limited reaction as priced in, focus shifts to next day’s CPI |
| Above expectations (re-acceleration) | Rise toward 148.00 | Pullback toward 1.1650 | Rate-cut bets fade, temporary USD buying pressure |
