The US Dollar jumps higher on hot PPI numbers.

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• The US Dollar jumps higher on hot PPI numbers.
• Markets are giving up gains again and turn red in the PPI aftermath
• The US Dollar Index jumps in the green for this week.

The US Dollar (USD) is telling two stories this week with, on the one hand, the recent uptick in inflation had hit a nerve in markets with a firm risk-off reaction on Tuesday. Though, the Retail Sales from Thursday show that dynamics for customers are changing with a substantial drop in numbers and the downward revision made traders completely write off the inflation report from Tuesday as a one off. This puts the US Dollar Index (DXY) flat to the same level where it opened on Monday with just one trading session left to look for direction.

On the economic data front, the decision on where the US Dollar will be heading, looks to have been decided by the US Producer Price Index. With big beats on all segments, the US Dollar is shooting higher. Unless the University of Michigan paints again another picture, the Greenback is set to close out this week on a high note.

The US Dollar Index (DXY) briefly bounced off the 100-day Simple Moving Average (SMA) near 104.20 on Thursday. This comes as quite a surprise seeing its poor performance over the past few days and weeks. The hot PPI print looks to be pushing the DXY in the green for this week.

Should the US Dollar jump Friday’s data to 105.00, 105.12 as key levels to keep an eye on. One step beyond there comes in at 105.88, the high of November 2023. Ultimately, 107.20 – the high of 2023 – could even come back into scope, but that would be when several inflation measures are coming in higher than expected for several weeks in a row.

As mentioned at the second paragraph above, that 100-day Simple Moving Average looks rather doubtful, near 104.24, so the 200-day SMA near 103.67 looks more solid. Should that give way, look for support from the 55-day SMA near 103.08.

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