The dollar slipped against the loonie, sterling, and kiwi ahead of January PPI data. A hot print could revive rate-hike bets; a soft one would pressure the greenback.
Alpha Score of 60 reflects moderate overall profile with moderate momentum, weak value, strong quality, moderate sentiment.
The dollar edged lower in early Thursday trading, giving back some of this week’s gains as traders waited on U.S. producer-price data due later in the session. The pullback was broad but shallow, with the greenback losing ground against the Canadian dollar, the British pound, and the New Zealand dollar.
The January PPI report, due at 8:30 a.m. ET, follows Tuesday’s consumer-price inflation reading. A hot number would revive bets that the Federal Reserve holds rates higher for longer, a scenario that typically lifts the dollar. A soft print, by contrast, would add to the case for a June cut, pressuring the greenback. That kind of binary outcome tends to tighten liquidity ahead of the release, several traders said.
Against the loonie, the dollar slipped to C$1.3870 after failing to hold above C$1.3900. A break above 1.3960 would signal further upside, said Chris, a proprietary trader with more than 20 years of experience. He added that he still favors the long side from a longer-term perspective. The pair has been range-bound since late January, with support near C$1.3800.
The GBP/USD pair recovered from an overnight dip to trade near $1.3470. Sterling held above support at $1.3420, a level that had been tested earlier in the week. Elevated interest rates in the United Kingdom continue to underpin the pound, making it an outlier among G10 currencies. Chris said he would look to buy the pair on a clear close above $1.3500 but needs to see that level broken first.
The New Zealand dollar bounced from an overnight low near $0.5760 to trade around $0.5810. The kiwi’s sensitivity to Asian growth and trade flows makes it vulnerable to any disruption in energy supply routes, including the situation in the Strait of Hormuz, Chris said. He favors selling into rallies near $0.5860 and would look to short below $0.5830, a continuation of the recent bearish trend. A hot PPI print could accelerate that move.
Early positioning data showed leveraged accounts trimming dollar longs ahead of the PPI release, a typical pre-event adjustment rather than a directional shift, traders said. The dollar’s broader direction still hinges on next week’s Federal Open Market Committee meeting, where markets ascribe roughly 60% probability to a hold versus a 25-basis-point cut, according to CME FedWatch.
The PPI report is the next concrete catalyst. A miss on the headline or core figure would likely extend the dollar’s early slide, while a beat could reverse the move and push the dollar back toward recent highs against the loonie and kiwi.
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