Published on Thursday, data on production inflation were unexpectedly disappointing, which caused the weakening of the dollar, but only local to all major currencies, except for defensive ones - the Japanese yen and the Swiss franc.

The data presented showed a decrease in July of the producer price index (PPI) by 0.1% instead of the expected increase by 0.1%. On an annualized basis, the growth in production inflation also fell from 2.0% to 1.9%, while a 2.2% increase was expected. The basic producer price index also in annual terms reduced the growth from 1.9% to 1.8%, while it was assumed that the indicator will show an upward trend to 2.1%. The monthly value of the basic producer price index (PPI) showed a negative value of -0.1% with the forecast for an increase of 0.1%.

The dollar's reaction to these figures was negative and quite emotional, but then its decline weakened and it even grew against the commodity currencies. The main reason for this dynamic is still the risk appetite of investors due to geopolitical tensions between the US and North Korea, which has already reached its peak and threatens to turn into a real military conflict if the parties do not stop and come to an agreement.

Noticeably on the wave of local weakening, the crude oil quotes rose, which jumped to the values of May this year, but could not stay there and fell to the minimum values of the beginning of this week. Oil is still negatively affected by market awareness that OPEC + attempts to reduce the supply of "black gold" on the world market are not feasible.

Today, the focus of the market will be the next important data on consumer inflation in the US. According to the presented data, the CPI in annual terms may grow by 1.8% against the previous value of 1.6%. On a monthly basis, the indicator is expected to show an increase of 0.2% last month versus the absence of a month earlier. It is assumed that the basic consumer price index in July added 0.2% against the increase in June by 0.1%, and its annual value remained unchanged at 1.7%.

If the data on consumer inflation are above expectations, it will provide local support to the US dollar, but if they fall below the forecast, the dollar will turn down.

Forecast of the day:

The AUD/USD pair is trading above the level of 0.7830 on the wave of the speech with the comment of the head of RBA Wheeler, who made it clear that the current rate of the Australian dollar CB is quite happy that you should not expect changes in the monetary policy in the foreseeable future. On this wave, the price decline below the level of 0.7830 will lead to its fall to 0.7785 with the prospect of a decline to 0.7700.

The GBP/USD is consolidating above 1.2965. We expect that it will resume its decline after the breakthrough of this mark on the wave of positive data on consumer inflation in the US. In this case, we should expect its decrease to 1.2840.