Forex News

• USD/JPY gains 0.40% on Thursday, supported by renewed US Dollar strength following US economic data.
• US producer prices accelerate in August, while Initial Jobless Claims decline to 206K.
• Markets now turn their attention to US inflation data due on Friday.

USD/JPY advances to around 154.15 on Thursday at the time of writing, up 0.40% on the day. The pair benefits from a rebound in the US Dollar (USD), supported by US data showing accelerating producer price pressures and a still-resilient labor market.

The United States (US) Producer Price Index (PPI) rose 5.4% YoY in August, above the 5.3% expected and accelerating from the previous 4.8% increase after revision. The core PPI, which excludes volatile food and energy components, increased 4.6% YoY, matching expectations and up from a revised 4.3% rise in July. On a monthly basis, headline PPI increased 0.4%, while the core index rose 0.2%.

Meanwhile, Initial Jobless Claims declined to 206K in the week ending September 5, compared with 207K in the previous week and slightly above expectations of 205K. Continuing Jobless Claims also edged lower to 1.774M, reinforcing the view that the US labor market remains relatively resilient.

The PPI data further strengthen expectations of a Federal Reserve (Fed) interest-rate hike in September. According to the CME FedWatch tool, markets now price in nearly a 70% chance of a rate increase, up from around 61% before the data were released.

On the Japanese side, the Japanese Yen (JPY) pauses after its recent rebound fueled by more hawkish expectations surrounding the Bank of Japan (BoJ). Markets fully price in a 25-basis-point rate hike at the September meeting, while recent comments from several central bank officials have reinforced expectations of further monetary policy normalization. This dynamic could, however, limit the extent of the USD/JPY advance.

Market attention now turns to the US Consumer Price Index (CPI) data due on Friday. The inflation report is likely to play an important role in shaping expectations for the Fed's interest-rate path. A stronger-than-expected inflation reading could support the US Dollar, while a sharper slowdown in price pressures could weigh on the Greenback, and in turn on USD/JPY.

National Bank of Canada's (NBC) Kyle Dahms highlights that Copper has reached a fresh nominal record, driven by AI-related data-centre demand, electricity grid expansion, tariff-driven stockpiling and supply disruptions. He notes that in constant Dollar terms Copper is at a 15‑year high and nearing its 2011 peak, raising costs for power grids, AI infrastructure and broader electrification projects.

Copper nears nominal and real highs

"The longer-term demand backdrop remains supported by AI-related data-centre construction and the associated expansion of electricity generation and grids, while the latest gains have been amplified by tariff-driven stockpiling and supply disruptions."

“One less obvious link to Hormuz is sulphur. Shipments through the Strait have been severely curtailed, helping push sulphur prices to more than twice their level at the start of the year. This matters for copper because sulphur is a key feedstock for sulphuric acid, which is used in certain processing methods.”

"On this basis, copper is trading at a 15-year high and will soon surpass its 2011 peak, a move that would lift the real price to its highest level since the mid-1970s."

"In our view, this increasingly represents a tax on the very investment intended to support future growth, raising the cost of power grids, AI data centres and other electrification projects just as geopolitical fragmentation is making supply less reliable."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Christine Lagarde, President of the European Central Bank (ECB), explains the ECB's decision to raise key rates by 25 basis points (bps) at the September policy meeting and responds to questions from the press.

ECB highlights resilient Eurozone growth but flags persistent inflation risks

The FXS Speechtracker score of 6.4 versus a 6.0 historic average signalled a mildly more confident tone as ECB President Lagarde underscored resilient growth, robust labour markets and an improved near-term outlook, even as employment gains slow and exports face competitiveness headwinds. The emphasis on consumption, public and private investment, and a recovered services sector leans modestly hawkish by reducing perceived urgency for rapid easing.

At the same time, guidance that headline inflation will stay above target through the first half of 2027, with energy shocks feeding into core and food, reinforces a hawkish bias despite longer-term expectations anchored near 2%. For Euro traders, the combination of stronger growth and sticky inflation argues for a higher-for-longer policy stance, while downside risks from wars, energy disruptions and climate-related food price shocks temper the hawkish tilt and may cap Euro upside on risk-off episodes.

ECB press conference key quotes

"Economy proving resilient."

"Resilience likely to persist into Q3."

"Manufacturing is solid."

"Consumer confidence rebounded."

"Services sector recovered."

"Labour market is robust."

"Growth in employment continues to slow."

"Near-term growth outlook has improved."

"This reflects resilience of consumption, public investment."

"Growth will be bolstered by business, housing investment."

"Exports held back by competitveness challenges, trade policies."

"Refining margins made strong contribution to inflation."

"Rising labour productivity has helped contain growth in unit labour costs."

"Wage tracker points to modest uptick in negotiated wage growth."

"Inflation expectations over shorter horizons remain at elevated levels."

"Most measures of longer-term inflation expectations stand at around 2%."

"Headline inflation to remain above target through first half of 2027."

Higher energy prices to feed throught to core, food gradually."

"Better economic outlook to feed into core."

"Headline inflation to return to target towards end of 2027."

"Risks to the growth outlook are to the downside."

"Downside risk due to Middle East war, Ukraine."

"Energy disruptions, worsening market sentiment, trade frictions among risks to growth."

"The energy shock could intensify further and its effects on other prices and wages could be stronger than currently expected."

"Extreme weather events, potentially reinforced by intensifying El Niño conditions, and the unfolding climate and nature crises more broadly, could drive up food prices."

"Gas prices, in particular, could increase in the event of further supply disruptions or an unusually cold winter coinciding with low storage levels."

"This is predominantly a supply shock."

"Markets do what they have to do."

"Discussion was focused on today's decision, did not debate future rate path."

"Not taking a view on which direction to go at next meeting."

"Uncertainty can change things almost overnight."

"Can't anticipate what will be the next move."

"Neutral rate band is a work in progress on constant basis."

"Neutral band highly conceptual."

"Not attaching great importance to neutral rate."

"Decision was a no brainer."

"Significant financing needs from AI is key driver."

"We are monitoring attentively bond market particularly long end."

"Yield rise not a Euro-specific issue."

"Have been surprised by economic resilience."

"Post cutoff data suggest even higher 2026 growth than in projection."

"Inflation has been lower recently than anticipated, especially food."

"But inflation is longer-lasting."

This section below was published at 12:15 GMT to cover the European Central Bank's (ECB) policy announcements and the initial market reaction.

The European Central Bank (ECB) announced on Thursday that it raised key rates by 25 basis points (bps) following the September meeting, as expected. With this decision, the interest rate on the main refinancing operations, the interest rates on the marginal lending facility and the deposit facility stood at 2.65%, 2.9% and 2.5%, respectively.

ECB delivers data-dependent hike as inflation risks stay elevated

The FXS Speechtracker score of 7.4 versus a historic 6.4 signals a more hawkish-than-usual ECB tone, consistent with a 25 bps hike across the deposit, refinancing and marginal lending facilities and inflation projections that remain above the 2% target through 2028. By flagging upside risks to inflation, downside risks to growth and a broad range of outcomes around the energy shock, the statement underscores a bias toward keeping policy restrictive even as the Euro-area outlook stays fragile.

The explicit commitment to a data-dependent, meeting-by-meeting approach and the refusal to pre-commit to a rate path keep optionality open, but the emphasis on strong monetary policy transmission and readiness to adjust all instruments reinforces a hawkish tilt. For FX, the combination of higher policy rates, persistent above-target inflation and ongoing balance sheet runoff via APP and PEPP supports the Euro on dips, especially against lower-yielding currencies, while the growth risks and elevated uncertainty may cap sustained Euro rallies and keep volatility elevated around incoming data.

ECB policy statement key takeaways

"Baseline of new ECB staff projections sees headline inflation averaging 3.0% in 2026, 2.5% in 2027 and 2.1% in 2028."

"For inflation excluding energy and food, baseline foresees 2.5% in 2026, 2.6% in 2027 and 2.3% in 2028."

"Compared with June, baseline projection for inflation in 2026 is unchanged, while it has been revised up for 2027 and 2028."

"Baseline projection for economic growth is 0.9% for 2026, 1.4% for 2027 and 1.5% for 2028."

"Outlook remains highly uncertain, with risks to upside for inflation and to downside for economic growth."

"In relation to energy shock, updated scenarios put together by staff illustrate broad range of outcomes for how growth and inflation would evolve under different assumptions about its intensity and duration, as well as its indirect and second-round effects."

"With today’s decision, ECB remains well positioned to navigate uncertainty caused by conflict."

"Will follow a data-dependent and meeting-by-meeting approach to determining appropriate monetary policy stance."

"In particular, ECB’s interest rate decisions will be based on its assessment of inflation outlook and risks surrounding it, in light of incoming economic and financial data, as well as dynamics of underlying inflation and strength of monetary policy transmission."

"ECB is not pre-committing to a particular rate path."

"APP and Pandemic Emergency Purchase Programme (PEPP) app and PEPP portfolios are declining at a measured and predictable pace, as Eurosystem no longer reinvests principal payments from maturing securities."

"ECB stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilises at its 2% target in medium term and to preserve smooth functioning of monetary policy transmission"

Market reaction to ECB interest rate decision

The ECB policy announcements failed to trigger a noticeable market reaction. At the time of press, EUR/USD was down 0.15% on the day at 1.1615.

This section below was published as a preview of the European Central Bank's (ECB) monetary policy announcements at 08:00 GMT.

• The European Central Bank is expected to hike key interest rates on Thursday after pausing in July.  
• ECB President Lagarde’s comments and updated economic forecasts will be closely scrutinized.
• The Euro is poised for a big reaction to the ECB’s policy announcements.

The European Central Bank (ECB) is expected to raise the interest rate on the Main Refinancing Operations and the Deposit Facility by 25 basis points (bps) to 2.65% and 2.50%, respectively. The ECB will announce the decision on Thursday at 12:15 GMT.

Unlike in July, the interest rate decision will be accompanied by the central bank staff’s updated economic projections and followed by ECB President Christine Lagarde’s press conference at 12:45 GMT.

The Euro (EUR) is likely to experience intense volatility around the ECB’s policy announcements, as all eyes will be on the central bank’s signals on the future rate path.

What to expect from the ECB interest rate decision?

The ECB is set to resume raising interest rates after pausing at its July monetary policy meeting.

Renewed hostilities in the Middle East and the resulting rebound in energy prices continue to spur inflation concerns and bolster rate-hike expectations.

The Eurozone’s Harmonized Index of Consumer Prices (HICP) annual inflation accelerated to a nearly three-year high of 3.3% in August, remaining above the ECB’s 2% target.

Meanwhile, the Q2 Gross Domestic Product (GDP) in the Old Continent grew 0.6% quarter-on-quarter (QoQ) after contracting by 0.2% in the first quarter. On a yearly basis, economic growth rose 1.2% from 0.3% in the preceding period. 

“The Eurozone macro backdrop argues in favor of bringing the policy rate closer to the upper end of the ECB’s 1.75%-3.00% neutral range. The swaps curve more than fully prices in ECB rates at 3.00% in the next twelve months, which is EUR supportive,” Analysts at BBH explained.

With a rate hike on Thursday all but certain and little change expected to September’s inflation and growth forecasts, the main focus will be on the language in the Monetary Policy Statement and President Lagarde’s comments during the post-policy meeting press conference.

Given recent hawkish commentary from several ECB policymakers, markets will closely watch for any hints from Lagarde about the possibility of additional rate hikes this year.

How could the ECB meeting impact EUR/USD?

The Euro remains stuck in a narrow range below 1.1650 against the US Dollar (USD), consolidating the pullback from three-month highs of 1.1711, ahead of the ECB event risks.

If President Lagarde signals that additional tightening could be needed, particularly because inflation remains well above the 2% target, markets could price a higher terminal rate.

A hawkish tone, combined with upward revisions to inflation forecasts, would likely support the Euro and push EUR/USD back above the 1.1700 round level.

On the other hand, the Euro could weaken sharply and send EUR/USD toward 1.1550 if the ECB president emphasizes weaker growth risks and characterizes the inflation shock from energy prices as temporary, suggesting a more cautious approach to future tightening. This scenario could prompt traders to scale back expectations for additional rate hikes and weigh on the EUR.

Dhwani Mehta, Asian Session Lead Analyst at FXStreet, highlights key technical levels for trading EUR/USD following the monetary policy announcement.

“The pair trades above the 21-day, 50-day and 100-day Simple Moving Averages (SMAs), while battling the 200-day SMA around 1.1640. The cluster of underlying SMAs suggests a constructive backdrop, and the Relative Strength Index (RSI) around 58.50 on the daily chart hints at firm but not overextended bullish momentum.”

“On the topside, the first hurdle aligns at the 1.1700 threshold. A sustained break above this barrier would open the way for a retest of the 1.1750 psychological barrier. Above that level, the 1.1790 supply zone will be exposed. On the downside, initial support is seen at the 100-day SMA around 1.1560, and the 50-day SMA near 1.1526, providing deeper layers of demand should a pullback unfold.”

• Gold trades under pressure as rising yields and Fed rate-hike bets favour the US Dollar.
• US CPI takes centre stage after producer inflation offers little relief.
• The daily chart points to neutral momentum, while XAU/USD remains capped below its 200-day SMA.

Gold (XAU/USD) extends its decline during American trading hours on Thursday as a recovery in the US Dollar (USD), rising US Treasury yields and Federal Reserve (Fed) rate-hike expectations weigh on the precious metal, while traders also assess the latest US Producer Price Index (PPI) data. At the time of writing, XAU/USD trades around $4,346 after reaching an intraday high of $4,434.

US PPI rose 0.4% MoM in August, matching market expectations and accelerating from the 0.1% increase recorded in July. Annual producer inflation climbed to 5.4%, slightly above the 5.3% forecast and up from 4.8%.

Core PPI, which excludes food and energy prices, offered a softer reading. The index rose 0.2% MoM, below the 0.3% forecast and the previous 0.3% increase. On an annual basis, core producer inflation increased to 4.6% from 4.3%, in line with expectations.

The figures kept the possibility of a Fed rate hike firmly on the table. At the same time, rising Oil prices due to tensions in the Middle East add to inflation concerns and strengthen the case for tighter policy. Attention now turns to Friday’s US Consumer Price Index (CPI) data, which could settle the debate over whether policymakers move ahead with a hike.

According to the CME FedWatch Tool, traders price in around a 64% probability of a rate hike next week. However, most economists surveyed by Reuters expect the central bank to keep interest rates unchanged through the end of the year. As a non-yielding asset, Gold tends to benefit when interest rates are low, as this reduces the opportunity cost of holding the precious metal.

Strategists at DBS caution that an "energy-driven squeeze represents a harder choice, potentially requiring the Fed to contain inflation expectations while adding pressure on growth," but add that "a credible Fed response could support the USD and ease longer-term inflation concerns."

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 98.10, recovering from an intraday low of 98.71. Meanwhile, the benchmark 10-year yield trades around 4.92%, its highest level since November 2023, after the Treasury’s larger bond buyback plan failed to impress markets.

In the near term, Gold remains vulnerable to rising Fed rate-hike expectations and elevated Treasury yields, while tensions in the Middle East are offering little direct support.

Technical analysis: Bears retain control below 200-day SMA

On the daily chart, XAU/USD holds above the 50-day and 100-day Simple Moving Averages (SMAs), suggesting underlying trend support, yet it remains below the 200-day SMA near $4,538, which caps the broader topside.

The Relative Strength Index (RSI) around 47 points to neutral momentum, while the Moving Average Convergence Divergence (MACD) indicator stays below zero with a negative reading and subdued histogram, hinting that rallies could still face selling pressure despite the constructive underlying structure.

On the topside, initial resistance is seen at the 200-day SMA around $4,538, with a break there exposing the next key barrier at the horizontal resistance level near $4,700. On the downside, immediate support emerges from the nearby price pivot zone around the latest close, followed by the 100-day SMA at about $4,339 and the 50-day SMA near $4,266. A deeper slide would bring the major horizontal floor at $4,000 into view as the next significant demand area.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Christine Lagarde, President of the European Central Bank (ECB), explains the ECB's decision to raise key rates by 25 basis points (bps) at the September policy meeting and responds to questions from the press.

Key quotes

"Significant financing needs from AI is key driver."

"We are monitoring attentively bond market particularly long end."

"Yield rise not a Euro-specific issue."

"Have been surprised by economic resilience."

"Post cutoff data suggest even higher 2026 growth than in projection."

"Inflation has been lower recently than anticipated, especially food."

"But inflation is longer-lasting."

"Won't comment on any fx intervention."

TD Securities’ Ryan McKay and Bart Melek note that Gold is outperforming other precious metals even as higher energy prices and rising Fed hike expectations weigh on the complex. They highlight that CTAs (Commodity Trading Advisors) could become sellers if Gold breaks specified downside levels, but stress that Dollar-debasement themes, central bank demand and ETF inflows provide a strong longer-term support base.

CTAs eye key gold downside levels

"Stronger headwinds for precious metals."

"gold gives up some gains but is outperforming the precious complex in relative terms."

"The yellow metal has been able to hold support in the higher range, even as the market grapples with renewed energy upside and the near-term increase in Fed hike probabilities."

"In the near-term, gold will have an elevated sensitivity to incoming data and headlines, with inflation data the next big catalyst."

"CTAs turn modest sellers below $4,367/oz and systematic funds become more prone to heavier selling below $4,300/oz."

"However, on a longer-term horizon the renewed dollar-debasement theme, elevated central bank buying and renewed ETF accumulation offer a strong support base."

"Strong data and a hawkish Fed may only catalyze relatively modest near-term selling, postponing the timing of the next leg higher, rather than leading to material downside."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Christine Lagarde, President of the European Central Bank (ECB), explains the ECB's decision to raise key rates by 25 basis points (bps) at the September policy meeting and responds to questions from the press.

Key quotes

"This is predominantly a supply shock."

"Markets do what they have to do."

"Discussion was focused on today's decision, did not debate future rate path."

"Not taking a view on which direction to go at next meeting."

"Uncertainty can change things almost overnight."

"Can't anticipate what will be the next move."

"Neutral rate band is a work in progress on constant basis."

"Neutral band highly conceptual."

"Not attaching great importance to neutral rate."

"Decision was a no brainer."

• Oil prices advance as attacks on vessels and energy facilities revive concerns over Middle East supply.
• Iran says it is ready to intensify the conflict if US strikes on its territory and infrastructure continue.
• US crude Oil inventories decline modestly ahead of the release of official stockpile data.

West Texas Intermediate (WTI) US Oil rises sharply on Thursday, trading around $97.00 per barrel at the time of writing, up 2.93% on the day. Oil prices benefit from a renewed geopolitical risk premium as the intensifying conflict between the United States (US) and Iran raises concerns over potential disruptions to energy supplies from the Middle East.

Tensions have escalated significantly over the past week following roughly a month of relative calm. A senior Iranian official said on Wednesday that the Islamic Republic was ready for a more intense war and would step up its counterstrikes if the US continued attacking its territory and infrastructure.

Risks to maritime traffic have now become a major concern for the Oil market. According to Reuters, Iran attacked 10 ships near the Strait of Hormuz after the US sank five Iranian Oil tankers, marking the largest wave of attacks on shipping by both sides since the conflict began six months ago.

The Strait of Hormuz represents a critical route for Middle Eastern energy exports, leaving the market particularly sensitive to any threat that could reduce Oil flows through the region. Attacks by Iran-backed Houthi militants on several energy facilities in Saudi Arabia, which prompted the temporary suspension of some operations, are also adding to supply concerns.

Prospects for a rapid de-escalation also remain limited. US President Donald Trump expects the conflict to continue beyond the November midterm elections and warns that significant relief in gasoline prices is unlikely before then. These comments reinforce expectations that geopolitical tensions could continue supporting Oil prices in the near term.

On the US supply front, data from the American Petroleum Institute (API) showed that crude Oil inventories in the US declined by 300K barrels in the week ending September 4. However, the draw was smaller than the 1.3M decline expected by the market and the 2.6M drop recorded in the previous week.

Investors now await official inventory figures from the Energy Information Administration (EIA), due later on Thursday. A larger-than-expected decline in US stockpiles could provide additional support to WTI US Oil, while developments surrounding the conflict between the US and Iran are likely to remain the main driver of prices in the near term.

Christine Lagarde, President of the European Central Bank (ECB), explains the ECB's decision to raise key rates by 25 basis points (bps) at the September policy meeting and responds to questions from the press.

ECB highlights resilient Eurozone growth but flags persistent inflation risks

The FXS Speechtracker score of 6.4 versus a 6.0 historic average signals a mildly more confident tone as the ECB President Lagarde underscores resilient growth, robust labour markets and an improved near-term outlook, even as employment gains slow and exports face competitiveness headwinds. The emphasis on consumption, public and private investment, and a recovered services sector leans modestly hawkish by reducing perceived urgency for rapid easing.

At the same time, guidance that headline inflation will stay above target through the first half of 2027, with energy shocks feeding into core and food, reinforces a hawkish bias despite longer-term expectations anchored near 2%. For Euro traders, the combination of stronger growth and sticky inflation argues for a higher-for-longer policy stance, while downside risks from wars, energy disruptions and climate-related food price shocks temper the hawkish tilt and may cap Euro upside on risk-off episodes.

Key quotes

"Economy proving resilient."

"Resilience likely to persist into Q3."

"Manufacturing is solid."

"Consumer confidence rebounded."

"Services sector recovered."

"Labour market is robust."

"Growth in employment continues to slow."

"Near-term growth outlook has improved."

"This reflects resilience of consumption, public investment."

"Growth will be bolstered by business, housing investment."

"Exports held back by competitveness challenges, trade policies."

"Refining margins made strong contribution to inflation."

"Rising labour productivity has helped contain growth in unit labour costs."

"Wage tracker points to modest uptick in negotiated wage growth."

"Inflation expectations over shorter horizons remain at elevated levels."

"Most measures of longer-term inflation expectations stand at around 2%."

"Headline inflation to remain above target through first half of 2027."

Higher energy prices to feed throught to core, food gradually."

"Better economic outlook to feed into core."

"Headline inflation to return to target towards end of 2027."

"Risks to the growth outlook are to the downside."

"Downside risk due to Middle East war, Ukraine."

"Energy disruptions, worsening market sentiment, trade frictions among risks to growth."

"The energy shock could intensify further and its effects on other prices and wages could be stronger than currently expected."

"Extreme weather events, potentially reinforced by intensifying El Niño conditions, and the unfolding climate and nature crises more broadly, could drive up food prices."

"Gas prices, in particular, could increase in the event of further supply disruptions or an unusually cold winter coinciding with low storage levels."

• EUR/USD extends its decline as the Euro gains little support from the ECB rate hike.
• The ECB lifts its deposit facility rate to 2.50% and raises its longer-term inflation forecasts.
• US PPI data and rising US Treasury yields help the US Dollar recover.

EUR/USD extends its intraday decline on Thursday as a recovery in the US Dollar (USD) weighs on the Euro (EUR), while the European Central Bank’s (ECB) widely expected rate hike fails to offer support. The Greenback also finds some support from US Producer Price Index (PPI) data, which showed hotter-than-expected annual headline inflation. At the time of writing, the pair trades around 1.1604, down roughly 0.25% on the day.

ECB raised its three key interest rates by 25 basis points, marking its second hike this year and bringing the deposit facility rate to 2.50%. The ECB said, “The conflict in the Middle East continues to generate inflation pressures, and inflation is set to remain well above target for an extended period. Today’s decision underscores the Governing Council’s commitment to setting monetary policy to ensure that inflation stabilises at its 2% target in the medium term.”

Updated projections show headline inflation averaging 3.0% in 2026, 2.5% in 2027 and 2.1% in 2028. Inflation excluding food and energy is expected to average 2.5% in 2026, 2.6% in 2027 and 2.3% in 2028.

The central bank warned that inflation risks are tilted to the upside, while risks to economic growth are tilted to the downside. It reiterated that future decisions will depend on incoming data and will be taken meeting by meeting, adding that it is not committing to a particular interest-rate path.

US PPI rose 0.4% MoM in August, matching market expectations and accelerating from the 0.1% increase recorded in July. Annual producer inflation climbed to 5.4%, slightly above the 5.3 forecast and up from 4.8%. Core PPI rose 0.2% MoM in August, below the 0.3% forecast and the previous 0.3% increase. On an annual basis, core producer inflation rose to 4.6% from 4.3%, in line with expectations.

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.10, recovering from an intraday low of 98.71. Rising US Treasury yields offer additional support to the Greenback, with the benchmark 10-year yield climbing to around 4.90%, its highest level since November 2023.

The PPI figures suggest that inflation pressures remain elevated, strengthening the case for a Federal Reserve (Fed) rate hike next week. Elevated Oil prices add to these concerns and could make it harder for inflation to return to the Fed’s 2% target. According to the CME FedWatch Tool, traders price in around a 64% probability of a 25-basis-point increase at the September 15-16 meeting.

Attention now turns to Friday’s US Consumer Price Index (CPI) report, which could play a more decisive role in shaping the Fed’s decision.