Dollar Index Holds Steady as Inflation Fears Loom Ahead of PPI Data
Forex markets have remained subdued since the beginning of the week, with the US Dollar (USD) holding near 99.00 on Tuesday, as depicted by the US Dollar Index (DXY). The DXY is now at 98.82, forming a 'doji' candlestick, which signals indecision among traders.
The focus will be on Thursday's Producer Price Index (PPI) print in the United States, with investors eyeing the data to gauge inflationary pressures. The European Central Bank (ECB) monetary policy meeting on Thursday is also expected to provide clues on interest rate decisions, with ECB President Christine Lagarde's speech being closely watched.
The EUR/USD has finally breached the 1.1600 figure, boosted by overall US Dollar weakness. Meanwhile, the GBP/USD jumped to 1.3561 before retreating somewhat to around 1.3539, following remarks by Bank of England (BoE) officials who said they're worried about energy prices and inflation.