Market News
Dollar dips as inflation data points to lower core PCE - REUTERS
Summary
- PPI hotter than expected, but points to lower core PCE
- Euro boosted by optimism on Russia, Ukraine peace deal
- Trump announces reciprocal tariffs on other nations
NEW YORK, Feb 13 (Reuters) - The dollar slipped on Thursday after components of January’s producer price report pointed to lower inflation, and fell further after the White House said that reciprocal tariffs on other nations would not be implemented immediately.
Producer price data on Thursday indicated that core PCE inflation, the Federal Reserve’s preferred measure, is likely to be lower than previously expected for January when it is released later this month.
It came despite producer prices rising more than economists expected.
“There were some subcomponents in there that show that PCE might not be as hot as CPI suggested,” said Noel Dixon, global macro strategist at State Street Global Markets.
The producer price report came after Wednesday's Consumer Price Index for January was much higher than expected, leading traders to price in fewer rate cuts this year.
Futures traders are now pricing in around 33 basis points of cuts by December, up from 29 basis points before Thursday's data, but down from 37 basis points before the CPI data was released on Wednesday.
