USD/THB dives as markets digest US PPI figures and Powell’s words
14.05.2024, 20:14

USD/THB dives as markets digest US PPI figures and Powell’s words

  • Recent US PPI data for April from the US met expectations.
  • Jerome Powell's cautionary comments on inflation and stringent policy measures instill a sense of uncertainty surrounding the USD.
  • All eyes are on Wednesday’s CPI figures from the US.

The USD/THB saw sharp losses on Tuesday, facing mixed influences from a robust US economy and cautious posture from the Federal Reserve (Fed). The US Producer Price Index (PPI) didn’t show surprises as markets gear up for Wednesday’s Consumer Price Index (CPI) report from the US.

On the US data front, the US PPI figures for April reinforced the US economic resilience showing a 2.2% year-on-year increase, in sync with market projections. Despite these robust indicators, cautiousness prevails with the Fed Chairman, Jerome Powell, maintaining a vigilant watch on inflation trends and emphasizing the need for pledging that rates may need to be kept higher for longer. Markets are betting, that the bank will start cutting in September and that a November cut is already priced in. However, the outcome of the CPI report might change those odds.

USD/THB technical analysis

The daily Relative Strength Index (RSI) of the USD/THB pair most recently recorded a level of 45. This RSI reading falls into negative territory, suggesting an elevation of selling momentum. The Moving Average Convergence Divergence (MACD) histogram prints red bars, indicating an increase in negative momentum for the USD/THB pair. The amalgamation of the negative RSI and negatively trending MACD implies a dominance of sellers in the market.

 

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