Continued Dollar Buying Trend: Focus on US Producer Price Index (PPI)
This week, the trend of dollar buying has strengthened. The cautious stance on rate cuts from the recent US FOMC meeting, along with stronger-than-expected US employment data, has diminished expectations for significant rate cuts in November. Yesterday’s US CPI also slightly exceeded market expectations, and while the increase in initial jobless claims prompted some dollar selling, it did not significantly reverse the dollar’s upward trend.
Today, the US Producer Price Index (PPI) is set to be released. The market may respond straightforwardly to the strength or weakness of inflation, with particular attention on how much the core year-on-year increase will be, which is likely to be a key factor.
Additionally, the preliminary Michigan Consumer Sentiment Index for October will also be released. While some adjustments are anticipated heading into the weekend, the dollar’s bullish trend is expected to continue this week.
Trading Strategy
The PPI has the potential to move the market unexpectedly, so caution is warranted. I will closely monitor the dollar’s movements following the release and aim for a quick response based on market reactions.
