The US Producer Price Index is expected in the economic calendar this afternoon. The report is of high importance to the forex market.
The scope of the Producer Price Index includes three goods-producing industries such as manufacturing, mining, and factory sectors. Analysts foresee a 0.1% decline in the PPI for August. Meanwhile, the PPI has been showing a zero dynamic so far.
Besides, analysts are awaiting another important data. Later today, the US Census Bureau will publish the retail sales report, which is an essential indicator of consumer spending. It is consumer activity, which generates the bulk of the US economy and accounts for 70% of GDP. Obviously, the situation on the currency market will depend on the US retail sales.
Aleksander Davydov comments,
"Markets expressed a neutral stance on the eurozone's inflation data as market participants are more focused on the retail sales report from the United States. On the back of the forecasts of lower retail sales excluding car sales as well as further contraction of producer prices, the US dollar could come under pressure.
Considering these expectations, the US dollar index could drop to the level of 94.35."
Meanwhile, the weak US dollar has already allowed the single European currency to hit a monthly high.
The most popular pair in Forex was driven to the level of 1.1420 by bulls.
The US currency is still feeble amid fears about a probability of the interest rates hike. At present, this issue is in question on the back of a decline in global markets triggered by the weak statistics from China.