Dollar gains ahead of PPI release; euro seeks ECB clues

investing.com:

Investing.com — The U.S. dollar edged higher in European trade Thursday, retaining recent strength ahead the release of more cues on U.S. interest rates in the form of producer inflation and retail sales data. 

At 06:00 ET (10:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 102.490.

The dollar received a boost earlier in the week after the release of a stronger-than-expected U.S. consumer price index print earlier this week, which ramped up bets that the Federal Reserve will take its time in reducing interest rates.

The U.S. currency has slumped around 1.7% over the last month, hit hard  last week by dovish comments from Fed chief Jerome Powell, during his two-day testimony in front of Congress, which were seen by the markets as suggesting the U.S. central bank was preparing to start cutting interest rates in the summer.

However, the index is still up around 1.5% this year as U.S. data has shown that the economy remains strong, and Tuesday’s CPI release suggested inflation remains a major sticking point.

The focus now turns towards the release of the producer price index for February, in particular, and retail sales for the same month for more clues as to the likely thinking by Fed officials ahead of next week’s policy setting meeting.

“PPI will be watched very closely as investors seek confirmation that inflation is not as hot as the CPI report suggested,” said analysts at ING, in a note. “The consensus is 0.2% month-on-month for core PPI, but the whisper number is surely higher after CPI.”

In Europe, EUR/USD edged 0.1% lower to 1.0942, with the lack of significant economic data in the eurozone contributing to a lack of volatility.

The ECB kept rates