020 7898 0500The US dollar continued on its upward curve on Tuesday, bolstered by an expected interest rate hike by the US Federal Reserve this evening. Dollar strength has been further aided by concerns around the Dutch and French elections in the Eurozone and Article 50 being invoked in the UK.
Sentiment remains positive towards the dollar as traders bet on the Federal Reserve increasing interest rates on more than one occasion in the coming months. Consequently, the market will be keenly digesting every word of the press conference for potential clues. The chances of an increase this month are currently priced in at 95%.
The US producer price index rose more than expected in February and the year-on-year gain was the largest in five years. In particular, a key gauge of underlying producer price pressures that excludes food, energy and so called trade services increased 0.3% – the biggest gain since April 2016. The core PPI figure rose 0.2% in Jan 2017.
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