By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) – The U.S. dollar was marginally down against the yen and euro on Wednesday after data showed producer prices unexpectedly fell in August, cementing expectations that the Federal Reserve will resume cutting interest rates later this month.
The dollar was slightly down against the yen at 147.37 following the data, while the euro turned marginally higher at $1.1714. Before the data, the U.S. currency was trading moderately up on the day against both currencies.
A Labor Department report showed the Producer Price Index for final demand fell 0.1% on a monthly basis, after a downwardly revised 0.7% jump in July. Economists polled by Reuters had forecast the PPI would rise 0.3% after a previously reported 0.9% surge in July.
But the PPI advanced 2.6% on an annual basis in August, compared with a 3.3% gain expected by economists polled by Reuters.
“The August PPI report paints a much less scary picture of prices of goods ‘in the pipeline’ than the July report,” Carl Weinberg, chief economist at High Frequency Economics wrote in emailed comments after the data.
“Core goods prices did rise, but by a lot less than expected. The entire report shows a lower rate of increase in the prices of goods at the factory gate for August than for July.”
Following the data, fed funds futures are pricing in a 90% chance of a standard 25-basis-point cut this month and a 10% chance of 50-bp rate decline, according to the CME’s FedWatch. That was at 93% and 7%, respectively, late on Tuesday.
Currency
bid
prices at
10
September
01:10
p.m. GMT
Descripti RIC Last U.S. Pct YTD Pct High Low
on Close Change Bid Bid
Previous
Session
Dollar 97.766 97.803 -0.02% -9.88% 97.934 97.6
index 27
Euro/Doll 1.1703 1.1709 -0.03% 13.06% $1.1728 $1.1
ar 683
Dollar/Ye 147.42 147.41 0.01% -6.31% 147.62 147.
n 27
Euro/Yen 172.56 172.59 -0.02% 5.72% 172.74 172.
39
Dollar/Sw 0.7975 0.7976 -0.02% -12.13% 0.7992 0.79
iss 62
Sterling/ 1.3533 1.3526 0.06% 8.21% $1.3567 $1.3
Dollar 514
Dollar/Ca 1.3855 1.3841 0.11% -3.64% 1.3864 1.38
nadian 39
Aussie/Do 0.661 0.6586 0.38% 6.84% $0.6626 $0.6
llar 58
Euro/Swis 0.9332 0.9337 -0.05% -0.65% 0.9345 0.93
s 26
Euro/Ster 0.8647 0.8651 -0.05% 4.5% 0.866 0.86
ling 41
NZ 0.5943 0.5925 0.35% 6.26% $0.5958 0.59
Dollar/Do 22
llar
Dollar/No 9.9209 9.98 -0.59% -12.71% 9.9938 9.90
rway 59
Euro/Norw 11.6118 11.6852 -0.63% -1.33% 11.692 11.6
ay 05
Dollar/Sw 9.3537 9.3787 -0.27% -15.1% 9.3977 9.33
eden 47
Euro/Swed 10.9478 10.9818 -0.32% -4.53% 10.9895 10.9
en 34
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Aidan Lewis and Bernadette Baum)
