Markets scrutinize indicators of inflation in the United States (US) this week with the focus on yesterday's New York session focused on producer price index (PPI) data which saw a dismal reading.
The US dollar experienced a decline yesterday after the data was published changing the horizontal movement pattern displayed at the opening of the week.
The monthly PPI reading for July was lower at 0.1% compared to expectations to remain at 0.2%.
The core PPI reading came in at zero versus a forecast of a 0.2% decline from the previous month's revised down 0.3% reading.
The dismal US producer inflation report triggered consumer inflation expectations (CPI) to be published today (Wednesday) also down.
The US CPI which has dropped to 3.0% in the previous reading will be an important indicator for the Federal Reserve (Fed) for further monetary policy setting.
The majority of the market now places high expectations that interest rate cuts will be implemented by the Fed at its September meeting.
However, the latest question that arises is, how much will the rate cut be?
Also focusing on today's trading will be the results of the New Zealand central bank (RBNZ) policy meeting in the Asian session while in the European session, UK inflation data will be published to influence the movement of the Pound currency.
The Pound and the Euro in yesterday's trade were seen taking advantage of the situation to rise as the US dollar moved weakly in the market.
And the situation is likely to continue if tonight's CPI figure also records a downward reading and continues to pressure the Fed to ease monetary policy.
