Dollar index firms to two-week high

The US dollar index is hovering firmly at a two and half week high, approaching the next psychological 107 mark that was attained last month. Gains in the counter came largely on the back of inflation concerns that drove the greenback after US producer prices data ticked higher. The PPI for November showed that headline inflation on the producer side rose by 3% on year, up from 2.4% in October and above forecasts of 2.6%, while core PPI increased by 3.4% annually, exceeding projections of 3.2% and rising from 3.1%. Dollar index that measures the greenback against a basket of currencies held at 106.80, up 0.14% on the day. All eyes will be on the US Federal Reserve (Fed) interest rate decision next week. Besides, ECB rate cut by 25 bps yesterday followed by Lagardes confirmed talks of a possible 50 bps interest rate cut going forward also propped up the DXY. Among basket currencies, EURUSD and GBPUSD stayed pressured at $1.0506 and $1.2654 respectively.

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