The dollar index (DXY00) rose by +0.22% today, reaching a three-week high amidst safe-haven demand due to stock market weakness and a stronger-than-expected U.S. industrial production report. Key numbers from June’s PPI report showed a month-over-month change of 0% and a year-over-year increase of +2.3%, both slightly below expectations.
In June, U.S. industrial production increased by +0.3%, surpassing expectations of +0.1%, while manufacturing production rose +0.1%. The New York Fed services business activity index improved from -13.2 in June to -9.3 in July. Expectations for a Federal Reserve rate cut remain low, with a 3% chance for a -25 basis point cut at the July 29-30 meeting.
The euro fell -0.28% against the dollar, despite a positive Eurozone trade surplus of 16.2 billion euros in May, which exceeded expectations. The Japanese yen faced downward pressure from the dollar’s strength and concerns about the upcoming upper house election in Japan on July 20.