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Inflation to emerge soon as producer prices surge most in six years

EURUSD News by Newsroom on 09:43 November 14, 2017 EST
U.S. producer prices rose more than anticipated in October, driven mainly by a surge in the cost of services, leading to the biggest annual increase in wholesale inflation in nearly 6 years.

A report from the Labor Department released on Tuesday also showed gains in underlying producer prices, which support the growing expectations of a gradual increase in inflation which will help the Federal Reserve to raise interest rates next month.

Total producer prices rose by 0.4% month pushing the year-on-year rate of gains from 2.6% to 2.8%.

Goods prices added 0.3% on the month following adding to the 0.7% up in September while those for services shot up by 0.5% after rising 0.4% during the prior month.

Final demand prices excluding food, energy and trade picked-up from a 2.1% rate of gains in the month before to 2.3%.

Stocks are broadly lower on Tuesday though main indices have not broken any significant support. The dollar is also weaker across the board and EURUSD is on the verge of trading above 1.175 though the dollar is still strong against gold and barely holding against oil.