USD Recovering? PPI Data Adds US Economic Risk Warning


 Focusing on Wednesday's trading yesterday was on the king of the US dollar currency when its movement pattern was observed after receiving a major impact following the inflation data of the United States (US) published last Tuesday.

The US dollar was seen to recover slightly yesterday from the biggest decline that occurred in the period of 1 year, even when the US economic data published in the New York session yesterday was less encouraging.

This slow recovery is seen to be supported by the rebound of the US 10-year treasury yield to 4.55%. While the dollar index hovers slowly below the 104.50 point level.

However, this situation is not enough to ease the concerns of the market which still sees pressure on the US dollar with the expectation that further depreciation will continue.

US retail sales data for October contracted 0.1% but slightly better than forecasts of -0.3%.

Meanwhile, the US producer price index (PPI) data contracted 0.5% for October, becoming the biggest contraction since April 2020 that exceeded the forecast of 0.1%.

The annual reading decreased from 2.2% to 1.3% and this is seen to be in line with the consumer inflation reading that has been published, giving an impression of a pattern of slower price increases.

Factory business survey data in New York (Empire State Manufacturing) meanwhile rose to 9.1 points for November, recovering from the previous contraction reading.

Market sentiment is also seen to increase pressure on the US dollar following the reading of China's economic data yesterday which was quite satisfactory.

This reduces the attraction of safe-haven currencies such as the US dollar when the market is in risk-on mode.

Focus shifted in the Asian session this morning (Thursday) to Australian jobs data with job gains recorded for October of 55,000 higher than the forecast of 22,800.

The unemployment rate rose from 3.6% to 3.7% as expected.

In the New York session tonight, the market will watch US jobless claims data to gauge the number of individuals who claimed insurance last week.

Commodity market developments, the crude oil market turned gloomy with price declines for both WTI and Brent benchmarks yesterday.

US WTI oil fell around $76.50 per barrel while UK Brent oil fell below $81.00 per barrel.

Gold trading, on the other hand, reduced some gains after the previous surge when the price fell $20 from the height of $1,975 reached to around $1,955 in the New York session yesterday.