US Dollar Index (DXY) Soars Again on the Everything Rout

The US dollar skyrocketed toward the end of the trading week, with investors pouring into the traditional safe-haven asset amid the broader market selloff. The greenback is poised for a weekly gain, adding to its 2022 spike amid high inflation and rising interest rates.

According to the US Bureau of Labor Statistics (BLS), the producer price index (PPI) slowed to 11% year-over-year in April, higher than the market forecast of 10.7%. Despite cooling off, producer prices remained elevated at a 40-year high.

The core PPI, which strips the volatile food and energy sectors, climbed on an annualized basis of 8.8% last month, slightly lower than the median estimate of 8.9%.

On the labor front, the number of Americans filing for unemployment benefits rose 203,000 in the week ending May 7, higher than economists’ expectations of 195,000. Continuing jobless claims eased to 1.343 million, while the four-week average, which removes week-to-week volatility, to below 193,000.

On Friday, import and export prices data will be released, which are expected to jump 0.6% and 0.7%, respectively, in April. Also, the University of Michigan Consumer Sentiment Index is forecast to ease to 64% in May.

The University of Michigan’s Consumer Expectations Index is projected to rise to 63 and Current Conditions is predicted to advance 70.5.

The US Treasury market was mostly in the red on Thursday, with the benchmark 10-year yield down 6.3 basis points to 2.85%. The one-year bill shed 1.3 basis points to 1.922%, while the 30-year bond dropped 2.7 basis points to 3.015%.

The US Dollar Index (DXY), which gauges the greenback against a basket of currencies, soared 0.89% to 104.77, from an opening of 104.01. The index is on track for a 1% weekly gain, lifting its year-to-date rally to nearly 9.2%.

The USD/CAD currency pair rose 0.41% to 1.3047, from an opening of 1.2994, at 20:55 GMT on Thursday. The EUR/USD fell 1.26% to 1.0383, from an opening of 1.0513.

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