The U.S. producer price index fell unexpectedly in August, marking the first decline in a year and a half. The producer price index fell by 0.1 percent after remaining unchanged in July, and that is the first drop since February 2017.
On a yearly basis, the PPI rose by 2.8% in August from July's 3.3% rise. The core PPI rose by 0.1% on monthly basis, and rising by 2.9% on a yearly basis.
Despite data that came below expectations for producer prices, overall inflation is still rising steadily in light of the strong labor market and strong economy. Following the data, the dollar was retreated against a basket of currencies from its daily high of 95.28 and currently trading at 95.08.
The pound rose from its daily lows a day before the Bank of England meeting, it is expected interest rates to remain unchanged, but Brexit talks will remain the challenge for sterling, GBPUSD is trading currently at 1.3011 levels.
Also, markets will wait for the ECB meeting on Thursday and monetary policy is widely expected to remain unchanged as the bank seeks to end its bond buying program by the end of this year. The euro is currently trading in a narrow range since the start of trading, slightly below Level 1.16.
