The US Dollar edges higher following an unexpectedly strong Producer Price Index (PPI) report, surpassing estimates

• The US Dollar edges slightly higher after stronger-than-expected PPI data.
• Traders are maintaining elevated US interest rates, anticipating fewer rate cuts from the Federal Reserve.
• The US Dollar Index remains above 102.50 but faces resistance in breaking past 103.00.

The US Dollar (USD) edged slightly higher on Friday, capping off a strong rally this week, largely driven by rate differentials. Looking ahead to next week, the key question will be whether the recent rise in US Treasury rates was overdone, given that the US Consumer Price Index (CPI) saw only a slight uptick in September compared to the previous month. This contrasts with statements from several Federal Reserve (Fed) officials this week, suggesting that more interest rate cuts are expected, which would lower US rates.

The economic calendar is nearing completion, with the final key data points for the week. While the US Producer Price Index (PPI) for September delivered an unexpectedly positive result, similar to Thursday’s CPI report, the last significant data will be the preliminary University of Michigan readings on Consumer Sentiment and inflation expectations for October.

Equities remain mixed as they seek direction, with the major European indices and US futures experiencing minor fluctuations in both losses and gains.

The US 10-year benchmark rate is currently trading at 4.10, remaining above the 4% mark.