The USD is little changed ahead of the PPI data after yesterday’s run higher. What next? | Forexlive

The USD is little changed with the biggest mover vs the close being the GBP with a decline of around 0.15%. Looking at the USD move vs. the major currencies, the changes are minimal:

• EUR -0.10%
• JPY -0.11%
• GBP -0.14%
• CHF +0.09%
• CAD +0.03%
• AUD -0.08%
• NZD +0.10.

In the video above, I take a look at the technicals driving the big three – the EURUSD, USDJPY and the GBPUSD. What is the bias? Remember in the US dollar did rise sharply versus the major currencies yesterday. What are the risks? What are the targets? I will go through each currency pair with a focus on those key trader levels.

Today, US PPI data will be released. Yesterday the CPI data came in about as expected but there were hints of inflation from tariffs in the core goods data that imply the creep higher has begun. That sent yields higher with the 30 year yield moving back above 5% and the 10 year yield approaching 4.5%, and the dollar to the upside.

The PPI data will help number crunchers to get a better feel on the Fed’s favored measure of inflation the core PCE. After the CPI, the expectation was for a gain of 0.35% for that key measure. What will the data today do to that estimate?. Expectations are for the month-to-month to rise by 0.2% for the headline and for the ex-food and energy. The final demand year on year is expected at 2.5% (versus 2.6% last month), while the core is expected at 2.7% (versus 3.0% last month)

The earnings release is continue to this morning, after a pretty good start yesterday although the markets took most of the stocks lower (i.e BlackRock, J.P. Morgan, Wells Fargo). Yesterday the Dow industrial average fell by -0.98%, the S&P fell by -0.40%, but the NASDAQ rose by 0.18%. All three closed near session lows however.

Looking at the earnings released this morning, more financials reported along with J&J (a Dow stock):

• Morgan Stanley (MS) Q2 2025 (USD): EPS $2.13 (BEAT; exp. $1.95), Revenue $16.8B (BEAT; exp. $15.93B)

• Goldman Sachs Group Inc (GS) Q2 2025 (USD): EPS $10.91 (BEAT; exp. $9.51), Revenue $14.58B (BEAT; exp. $13.48B); raises quarterly dividend to USD 4/shr

• Bank of America Corp (BAC) Q2 2025 (USD): EPS $0.89 (BEAT; exp. $0.85), Revenue $26.5B (MISS; exp. $26.75B)

• PNC Financial (PNC) Q2 2025 (USD): EPS $3.85 (BEAT; exp. $3.54), Revenue $5.66B (BEAT; exp. $5.61B)

• Johnson & Johnson (JNJ) Q2 2025 (USD): EPS $2.77 (BEAT; exp. $2.66), Revenue $23.74B (BEAT; exp. $22.90B); raises outlook

Economic data released in the in session showed UK inflation surprises to the upside in June:

• Headline CPI rose to 3.6% y/y (exp. 3.4%, prev. 3.4%)

• Core CPI climbed to 3.7% y/y (exp. 3.5%)

• Services inflation held firm at 4.7% (exp. 4.6%)

This hotter-than-expected report could pressure the Bank of England to delay rate cuts as inflation proves sticky across core and services categories.

Also, overnight, Dallas Fed President Lorie Logan spoke and stated that her base case remains for the Federal Reserve to keep interest rates modestly restrictive for some time in order to ensure inflation continues to move sustainably toward the 2% target. Speaking at a World Affairs Council event, Logan said she would need to see low inflation persist longer to be convinced that easing is appropriate. While June CPI data suggests PCE inflation may rise in the near term, she noted that weaker inflation and a softening labor market could justify rate cuts “fairly soon.” Logan also emphasized that under her base case, the economy can maintain maximum employment even with modestly tight monetary policy. However, she acknowledged the risk of misjudging the timing—if the Fed waits too long to cut, it may have to lower rates more aggressively later to support employment.

Logan also highlighted considerable uncertainty regarding the inflationary impact of tariffs. She noted that many companies are hesitant to raise prices until they better understand how the new tariffs will evolve. While economic models treat tariffs as having a one-time price effect, Logan pointed out those models are based on smaller-scale tariffs. She stressed the importance of monitoring data into the fall and reiterated the Fed’s commitment to transparency and credibility in policy communication. Ensuring inflation expectations remain anchored is essential, she concluded.

Meanwhile present Trump said:

• They are working on 5-6 trade deals and will likely be 2-3 by August 1
• Pharma tariffs will probably begin at month end, and will initially be low
• Will released tariff letters for small countries soon and will probably set a tariff rate for all them over 10%

The premarket levels for US stocks, the futures are implying:

• Dow industrial average
• S&P index
• NASDAQ index

Looking at the US debt market, yields are little changed but lower:

• 2-year yield 3.952%, -0.6 basis points
• 5-year yield 4.045%, -0.7 basis points
• 10 year yield 4.483%, -0.4 basis points
• 30 year yield by .016%, -0.1 basis points