DXY Futures Surge Above 105 Mark As US Inflation Stays Stubbornly High; US PPI Eyed For Further Cues

The dollar index futures rallied to a 5 month high above 105 mark following hotter than expected US inflation data that further delays possibility of a Federal rate cut. Data from US yesterday showed that headline inflation increased to 3.5% on year in March, up from 3.2% in February and beating the 3.4% expected. This was also this highest level since October last year. Core CPI measurement, excluding volatile food and energy costs reflected February's increase with an annual rise of 3.8% in March. The dollar index futures that measures the greenback against a basket of currencies climbed 1% and hit a high of 105.09 in immediate reaction to the data and is currently quoting at 105.03, almost unchanged on the day. US benchmark treasury yields also spiked to 4.55% that could keep the greenback at elevated levels. Investors now look ahead to Thursdays US producer price index report and ECB monetary policy for further insights on currency movements. Among the basket currencies, EURUSD and GBPUSD edged below the psychological levels and are quoting at $1.0765 and $1.2544 respectively.

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