Daily Market Update

Buck down following PPI, Euro climbs, Peso falls

May 14, 2024

The U.S. Dollar is trading in familiar ranges after a bit of a swing in its favor faded post-Producers Price Index release.


Indeed, the inflationary figure caused some commotion after April’s advancement exceeded the 0.3% expectation coming in at half a percent. It caused the yearly PPI average to rise from 2.1% to 2.2%. however, a closer look showed that the prior month’s figures were downwardly revised and showed deflation by coming out in negative territory, worth noting also that the National Federation of Independent Business survey gauging optimism came out more positive than forecast.

Overall, it seems inflation is showing some stubborn signs once again, but with some deflation on the record, the enthusiasm over this data affecting the chances of interest rate cuts has faded. Those odds currently stand at 10.0% for June, 22.0% for July, and 48.0% for September.

On the geopolitical front, reports showed that China’s leadership is not looking to retaliate over announcements from the U.S. regarding new tariffs, particularly on EVs and other high tech. Meanwhile, the world’s second-largest economy is struggling with another major developer folding thus impacting the prices of iron ore and other materials as demand is likely to diminish. The People’s Bank of China meets tomorrow, and a plethora of data is due next few days. There will also be commentary from central bank leaders sprinkled throughout today as well as the remainder of the week.

What to Watch Today…

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The Mexican Peso is an exception at the moment in losing ground to the Buck while, all across the board, has a resurgence. A week without data will meet its opposite next when everything from inflation to growth will be released. As a group, LATAM currencies are having a moment with Argentine Peso (ARS) being the only currency with a loss thus far in May. The Chilean Peso has jumped by over 4.5%, correlating with the prices of copper improving, while all others, along with MXN, are up 1.0% on average.


The Euro has picked up a bit of momentum after PPI figures out of the U.S. suggested there is a bit of stubborn inflation for suppliers. Tomorrow, we will get Gross Domestic Product numbers as well as Industrial Production, while Friday, we see inflation in the form of Consumer Price Index.

After Germany came out of a recessionary period and the rest of the nations seem to be looking with potential for overall half percent growth for the year, the shared currency is gaining regardless of almost guaranteed chances that the European Central Bank will proceed in slashing borrowing costs. We are experiencing the highest Euro level in five weeks.


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