FX.co ★ DXY Firms After Hot PPI

The dollar index held above 97.7 on Friday and was little changed for the week, supported by hotter-than-expected inflation data that strengthened expectations the Federal Reserve will keep interest rates on hold. January’s PPI increased 0.5% month-on-month, up from 0.4% in December and above the 0.3% consensus, underscoring persistent price pressures. Labor market data also pointed to resilience, with both initial and continuing jobless claims coming in below forecasts, indicating a stable employment backdrop and solid worker retention. Money markets are still pricing at least two Fed rate cuts this year, with the first fully discounted for July. Investors also monitored potential US tariff hikes from 10% to 15% on select countries, as well as ongoing US–Iran nuclear negotiations scheduled to continue next week. The dollar is poised to end the month up 0.9%, breaking a three-month losing streak.