Forex Today: US Dollar Weakens Ahead of PPI Report Amid Geopolitical and Trade Concerns

Forex Today: US Dollar Weakens Ahead of US PPI Inflation Data

The US Dollar (USD) continues to edge lower in Thursday’s early trading, touching a two-month low around 98.25 on the US Dollar Index (DXY). The ongoing decline comes ahead of the US Producer Price Index (PPI) report for May, a key inflation gauge watched by markets to assess the Federal Reserve’s next monetary policy move.

US Dollar Under Pressure Amid Economic and Political Uncertainty

The USD selloff remains strong as US CPI data disappointed market expectations. The monthly inflation rose only 0.1%, with yearly CPI easing to 2.4%, below forecasts of 2.5%. These results increased market confidence that the Federal Reserve may cut interest rates as early as September.

Trade and Geopolitical Concerns Dominate Sentiment

Although US-China trade tensions have slightly eased, President Donald Trump’s openness to delay the July 8 trade deadline adds uncertainty. Moreover, concerns over broader trade policy remain due to lingering tariff threats on other partners.

Middle East tensions are also heightening risk aversion. Reports surfaced that Israel is preparing for potential military action against Iran, adding another layer of geopolitical risk, despite continued diplomatic efforts by the US.

What to Watch Next

• US May PPI data release from the Bureau of Labor Statistics (BLS)
• US Treasury 10-year note auction
• Comments from Fed officials ahead of the June FOMC meeting
• Any developments in US-Iran or US-China relations

Related Articles on Tredu:

• Fed Rate Cut Expectations Grow After CPI Miss
• Geopolitical Risk and Safe-Haven Currencies
• What PPI Data Means for the US Dollar