EUR/USD nears 19-month lows at 1.1045 ahead of the US PPI release

The Euro (EUR) extends losses on Friday as mixed Eurozone macroeconomic data failed to offset the broad US Dollar's (USD) strength, with US Treasury yields surging amid speculation of a large Federal Reserve (Fed) rate hike next month. The EUR/USD pair languishes a few pips above 19-month lows at 1.1045 as investors await US Producer Price Index (PPI) figures, due in a few minutes.

Producer inflation is expected to have accelerated to 6.6% year-on-year (Y-o-Y) in October, its highest level since 2022, in the aftermath of the COVID-19 crisis, up from 6.3% in September. Core inflation is expected to have remained growing at a steady 5% Y-o-Y rate, all in all showing levels that support calls for a tighter monetary policy.

Mixed Eurozone data fails to support the Euro

Preliminary data from the Eurozone released earlier in the day revealed that the region's economy grew at a steady 0.4% pace in the third quarter as measured by Gross Domestic Product (GDP), while the yearly growth maintained a steady 1.3% growth pace, unchanged from the previous quarter and in line with market expectations.

On the negative side, Preliminary Q3 Employment Change data showed a 0.1% rise against expectations of an improvement to 0.2% after another 0.1% uptick in Q2. Beyond that, September’s Trade Balance showed a EUR 10.3 billion deficit, an improvement from the EUR 16.6 billion trade gap posted in August but more than twice the EUR 4.5 billion shortfall expected by the market.

Dollar surges as Fed hike expectations drive short-end yields higher

Meanwhile, the US Dollar maintains a bid tone, buoyed by a sharp recovery in US Dollar yields, as Federal Reserve (Fed) policymakers open the door for an XL rate hike at its December meeting.

Analysts at ING observe that “This week has seen a powerful, macro-driven rally in the Dollar,” with the move closely tied to a sharp repricing of the Fed’s near-term policy path.

“Short-dated US yields are close to 40bp higher since Tuesday morning, when the Fed's Christopher Waller mused over the need for a 50bp hike in December,” according to ING experts, who also affirm that “the market has since adopted the view that back-to-back December and January hikes look likely,” to explain how swiftly rate expectations have shifted in favour of the Dollar.

Economic Indicator

Producer Price Index (YoY)

The Producer Price Index released by the Bureau of Labor statistics, Department of Labor measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed as an indicator of commodity inflation. Generally speaking, a high reading is seen as positive (or bullish) for the USD, whereas a low reading is seen as negative (or bearish).

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Next release: Fri Nov 13, 2026 13:30

Frequency: Monthly

Consensus: 6.6%

Previous: 6.3%

Source: US Bureau of Labor Statistics

Economic Indicator

Producer Price Index ex Food & Energy (YoY)

The Producer Price Index ex Food & energy released by the Bureau of Labor statistics, Department of Labor measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Those volatile products such as food and energy are excluded in order to capture an accurate calculation. Generally speaking, a high reading is seen as positive (or bullish) for the USD, whereas a low reading is seen as negative (or bearish).

Read more.

Next release: Fri Nov 13, 2026 13:30

Frequency: Monthly

Consensus: 5%

Previous: 5%

Source: US Bureau of Labor Statistics