13.05.202612:57:52UTC+00DXY Extends Gains After Hot PPI Report

The dollar index climbed above 98.5 on Wednesday, posting a third straight session of gains as investors ramped up bets that the Federal Reserve will keep interest rates elevated for longer in response to mounting inflation pressures tied to the war in Iran. Market expectations turned more hawkish after data showed that US wholesale inflation accelerated in April to its fastest pace since 2022, driven in part by higher freight and transportation costs stemming from disruptions in the Middle East. The producer price index rose 6% year on year, beating all forecasts, while the monthly increase was also the strongest since 2022. Core producer prices, which exclude food and energy, advanced 5.2% from a year earlier, marking the largest gain in more than three years. Even if the current ceasefire holds and the Strait of Hormuz reopens soon, economists expect elevated energy and shipping costs to continue feeding into inflation as supply chains and oil production normalize only gradually.