The US dollar jumped around 30 pips after hot PPI data added to the January inflation warnings. CPI earlier this week caused a fright in markets and import/export prices were also high.
I wonder if there aren’t some seasonal adjustment problems at the turn of the year.
That said, you have to trade the data you have and Treasury yields rose 3-4 bps across the board on the numbers. Fed fund futures are now pricing in 86 bps in cuts this year compared to 96 before the data.
As you can see on the euro chart, the dollar isn’t quite sure if it wants to run with this
EURUSD 10 mins