Market News

Summary

Markets await PPI data later today
Economists argue CPI figures will not slow down Fed cuts
Trump remarks on Powell in focus
Investors in Japanese assets on hold before elections
July 16 (Reuters) - The dollar edged down against the euro and yen on Wednesday after hitting multi-week highs the previous day, as investors awaited producer price data later in the session for clues on potential tariff-driven inflation.
Data on Tuesday showed substantial increases in prices of heavily imported items, shoring up the dollar and driving U.S. rates higher.

The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here.

Meanwhile investors priced in 44 bps worth of Fed easing by December, down from 50 bps at the start of the week.

"Higher tariff-related goods inflation justifies their (the Fed) more cautious stance, while continued disinflation across services categories should support rate cuts in September and beyond," said Tiffany Wilding, economist at PIMCO.
"We believe the fact that inflation is more concentrated in core goods categories will make it easier for the Fed to communicate why they are cutting rates while inflation is above target," she added.
The market focus is now on U.S. producer price data to be released later in the day, which may indicate whether price pressures are beginning to pick up.
Against the yen , the greenback was down 0.1% at 148.65 after hitting a 3-1/2-month peak of 149.19.