The US dollar gained strength on Thursday following a surprisingly high July producer price index, which rose 0.9% month-over-month, far exceeding the expected 0.2%.
This sparked renewed inflation concerns, pushing Treasury yields up with two-year yields rising over five basis points. Equities wavered, crude oil prices climbed and gold briefly dipped as markets adjusted ahead of the Trump–Putin summit.
Federal Reserve officials, including Richmond Fed President Tom Barkin, remain cautiously optimistic, citing a strong labor market with a 4.2% unemployment rate and attributing slower labor force growth to retiring baby boomers. St. Louis Fed President Mousalum echoed Fed Chair Powell’s cautious stance on policy changes, noting the puzzling lack of tariff impacts on prices.
Meanwhile, Treasury Secretary Bessent announced plans for a budget-neutral Bitcoin reserve using seized assets, and rumors of a government stake in Intel boosted its shares nearly 10%.
Exclusive FX research from LMAX Group Market Strategist, Joel Kruger
