The dollar index fell to 105 on Tuesday as traders digested fresh PPI data and its implications for the Fed’s plans. Producer prices rose much more than expected in April, but the March reading was revised sharply lower, which offered investors some relief. Also, Chair Powell’s comments at the Meeting of the Foreign Bankers’ Association in Amsterdam did not offer any new clues. “We did not expect this to be a smooth road. But these [PPI readings] were higher than I think anybody expected,” Powell said. “we’ll need to be patient and let restrictive policy do its work.” Traders now await the key CPI reading due tomorrow. The odds for a Fed rate cut initially fell but then returned to roughly the same level as they were before the PPI release, at 65% in September and 78% for November. The dollar was losing mostly against the euro, the Aussie, the Kiwi dollar and the Pound but was strengthening against the yen.
