Should we wait and see if the weakening of the U.S. dollar, which has accelerated due to the decline in the U.S. PPI, will continue?

Should we wait and see if the weakening of the U.S. dollar, which has been accelerating due to the decline in the U.S. PPI, will continue?

14.07.2023

In yesterday’s U.S. currency trading, the U.S. dollar fell against the yen after the U.S. June Producer Price Index (PPI), released yesterday, declined from 1.1% to 0.1% year-over-year. The USD/JPY pair fell by about 1 yen, from 138.933 to 137.910.The decline continued during today’s Asian session, with the pair touching 137.275. Technically, USD/JPY has shown a slight rebound after touching the 200-day simple moving average (SMA) on the weekly chart, so we will be watching closely to see if the upward momentum strengthens during European trading hours.

Despite the fact that the EU’s May industrial production, released yesterday, fell from 0.2% to -2.2% year-on-year, the euro rose against the yen.The EUR/JPY pair rebounded from 153.881 to 155.125, rising to just below the daily 20-day moving average (MA). In early Asian trading today, the pair faced resistance at the daily 20-day MA, but it has been recovering in the latter half of the session. It will be worth watching to see if a trend toward a weaker yen resumes during U.S. trading hours.

Today’s economic indicators include Norway’s trade balance at 3:00 PM, Switzerland’s producer import prices at 3:30 PM, Turkey’s home sales at 4:00 PM, the Philippines’ consumer price index at 5:00 PM, and the Eurozone’s, Brazil’s Retail Sales at 21:00, Canada’s Manufacturing Shipments and the U.S. Import Price Index at 21:30, Canada’s Existing Home Sales at 22:00, and the U.S. University of Michigan Consumer Sentiment Index (Preliminary) at 23:00. We will be closely monitoring price movements over the weekend to see if the weakening of the U.S. dollar, which has accelerated due to the decline in the U.S. PPI, will continue.