PPI Surge Sparks Rate Hike Fears and Pounds Slide

The US Producer Price Index (PPI) in August exceeded forecasts on an annual basis at 5.4%, above the 5.3% projected, causing investors to price in a more hawkish Federal Reserve.

This has pushed up the odds of a rate hike at the September meeting, with the CME FedWatch Tool showing a nearly 70% chance of a 25-basis-point increase.

The UK's Pound Sterling lost traction against the US Dollar after the data release, trading at 1.3525, down 0.17%, while energy prices continued to trend higher, with Brent and West Texas Intermediate prices surpassing the $100 per barrel barrier once again.