• EUR/USD steadies near one-month lows as markets digest US economic data.
• Mixed US PPI contrasts with firm Retail Sales.
• Markets look ahead to remarks from Fed officials later in the American session.

The Euro (EUR) trades little changed against the US Dollar (USD) on Wednesday, with traders showing a muted reaction to the latest US Producer Price Index (PPI) and Retail Sales data. At the time of writing, EUR/USD trades around 1.1656, holding near one-month lows as the Greenback comes under modest pressure following the data.

A two-month snapshot of US producer inflation delivered a mixed message. The delayed October PPI report, postponed by the government shutdown, showed headline PPI rising 0.1% MoM after September’s 0.6% increase, while the annual rate eased to 2.8% from 3%. Core PPI increased 0.3% MoM after September’s 0.4% rise, while the annual core rate held steady at 2.9%.

The November figures were firmer. Headline PPI rose 0.2% MoM, matching expectations and accelerating from October, while the annual rate climbed to 3% from 2.8%, coming in above forecasts of 2.7%.

Core PPI was unchanged on the month, undershooting expectations for a 0.2% rise, but the annual core rate increased to 3% from 2.9%, also exceeding the forecast.

US Retail Sales data for November pointed to resilient consumer demand. Headline sales rose 0.6% MoM, beating expectations of a 0.4% increase and reversing October’s 0.1% decline. Annual sales growth held at 3.3%.

Sales excluding autos climbed 0.5% on the month, above forecasts of 0.4% and October’s 0.2% rise. The control group, which feeds directly into Gross Domestic Product (GDP) calculations, increased 0.4% after October’s 0.6% rise.

The PPI and Retail Sales releases did little to materially shift expectations around the Federal Reserve’s (Fed) monetary policy outlook. Markets had already been pricing in two rate cuts this year, a view that was reinforced by Tuesday’s softer-than-expected core inflation data.

The Fed is still seen on a gradual easing path, although policymakers are widely expected to keep interest rates unchanged through the first quarter, with July currently viewed as the most likely window for the first cut of the year.

Looking ahead, focus shifts to remarks from Fed officials, including Philadelphia Fed President Anna Paulson and Fed Governor Stephen Miran. Earlier in the day, Minneapolis Fed President Neel Kashkari said it is “entirely plausible” that inflation could remain well above the Federal Reserve’s 2% target for another two to three years, according to an interview with The New York Times.