Meanwhile, the British pound added 0.5% against the dollar and the yen gained 0.3%. The euro, however, reversed course and was down 0.1% versus the greenback.
“PPI is often considered a lead indicator of [the Consumer Price Index], so the data suggests that a further cooling in CPI is on the way. The evidence is looking more and more convincing that inflation is falling. This builds on expectations that the Fed will slow the pace of rate hikes,” Fiona Cincotta, senior financial markets analyst at City Index, wrote in a note.
“While Fed speakers, such as Lael Brainard, have suggested that the time could be approaching for less aggressive rate hikes, they have also been keen to point out that there is still work to do to bring inflation lower,” said Cincotta.
“However, the market sees the light at the end of the rate-hiking tunnel, even if that is in 2023, which is helping boost sentiment and lift demand for stocks. Meanwhile, the USD is tumbling lower as a less hawkish Fed is starting to look likely.”
