I warned that could happen.
The US PPI was hotter than expected and the US Dollar initially jumped around 75 pips across the board. Since then, he has returned most of the winnings.
At the end of the day, PPI is still PPI. It’s a second-tier indicator that doesn’t always offer a clue as to what’s to come for the CPI. It mainly tells you about commodity prices and lets us see what has happened to them (particularly oil) since the end of November.
The spike and then the fade is precisely what happened last month and before the report I wrote this:
The big move after last month’s report has subsequently faded, so it’s a good bet to be the playbook again if there’s a big move in the market.
Keep this manual in mind next month.