The US producer report (PPI) sparked a USD selloff yesterday. The consumer inflation (CPI) and retail sales reports today, however, were quite positive, and are reversing the trend for the USD.
Yesterday's PPI report proved to be negative. This came as quite a shock, being that the prices of raw materials and commodities have been increasing recently. USD sellers became active, and the Buck is more than 200 pips lower today.
The market was expecting negative numbers once again, however, the numbers were quite positive. Core numbers are usually the most important ones, sd they strip out most of the noise. Core numbers, both for retail sales and CPI reports, beat expectations. This took the yearly core inflation to 1.7% in the US. That’s closer to the 2% target for the FED, so it is a positive rate hike.
Our NZD/USD signal is back on track
This should have sent the USD surging, but with great surprise we can see that that is definitely not the case. After an initial jump, the Buck is now retracing. In fact, the Euro and the Pound didn’t even seem notice the impressive data from the US. The GBP is currently taking off as a result of Brexit, which we will explain in the next forex update.