Will the dollar index take any notice of US PPI data today?

Now that the markets have fully digested the latest US CPI data, the less intense focus today will concern the release of the latest PPI (Producer Price Index). That is due out at 1.30pm GMT and is worth keeping an eye on. The only reason I say that, is to repeat what I have said before, regarding the potential for PPI data to have a lagged effect on CPI a few months thereafter. So, in that sense, whilst latent to the current date, it can be forwarding guiding in that sense. However, I must also stress, this is not, by any means a hard and fast correlated forerunner for future CPI projections. So, the dollar will still be keen to see what appears here and once again I have to note the importance of that 104.33 resistance level for the USD index (USDX). Yesterday the index erroneously fell to just below 103.50 (a pip or two below 200 day moving average, at 103.54 today) immediately after the CPI data. It then rebounded (as indeed it should have), back above 104, reaching 104.10. It was not able to hold all that gain and later closed at 103.86. Earlier today it tested the 104 handle again, stalling at 103.997. So, we have an immediate range still in place, defined by 103.54 and 104.33, with a decisive break either side, if seen likely to deliver an extension