I warned this might happen.
US PPI was hotter than expected and the US dollar jumped around 75 pips across the board initially. Since then, it's given back most of the gains.
At the end of the day, PPI is still PPI. It's a second-tier indicator that doesn't always offer a hint at what's coming for CPI. It tells you mostly about commodity prices and we can see what's happened to them (especially oil) since the end of November.
The spike and then fade was precisely what happened last month and before the report I wrote this:
The big move after last month's report was subsequently faded so that's a good bet to be the playbook again if there's a sizeable market move.
Keep this playbook in mind next month.
