The EUR/USD currency pair remained choppy price action on Wednesday, challenging the 1.1700 area. This lackluster performance mirrored wider market sentiment as traders responded to the most recent economic data out of the United States.
The US Producer Price Index (PPI) for August surprised analysts on Wednesday with a low headline PPI. It recorded an annual increase of 2.8%, when expectations were for a 3.5% increase. This shocking number has been the cause of quite a bit of turmoil involving US Dollar. Equally perplexing was the non-committal performance of the EUR/USD currency cross.
A disappointment on the PPI front – usually a catalyst for currency moves – yielded a disinterested response from the EUR/USD. Market participants didn’t panic or panic buy on the announcement. They remained stuck in the mud near the important 1.1700 level, contending with contradictory inputs.
Market analysts note that the EUR/USD has been sidebarring recently. This type of behavior usually reflects traders’ nerves as they hold and await key economic readings and news. The currency pair finds it difficult to pierce through or under the 1.1700 level. This undeniable stagnation can only produce a period of consolidation until we all have greater clarity on things.
Traders are still digesting what the US PPI data means. The last thing that Wall Street wants is for the economic reports and the Federal Reserve announce or allude to a likely direction for the currency markets. Weighing on the mix of economic signals has been ongoing uncertainty. These are signals that will probably provoke more volatile movements in the EUR/USD currency pair in the next days.