Published on May 13, 2026
The dollar gained on Wednesday after hitting a two-week high following the latest hot U.S. inflation reading, with markets focusing on the talks set to begin between President Donald Trump and Chinese President Xi Jinping.
The Labor Department said the producer price index surged 1.4% last month, the largest increase since March 2022 and well above the 0.5% estimate of economists polled by Reuters, after an upwardly revised 0.7% advance in March.
In the 12 months through April, the PPI jumped 6.0%, the largest increase since December 2022 and above the 4.9% forecast, after a 4.0% annual increase in March.
“That escalated quickly,” said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin.
“With a 15.6% increase in the index for gasoline, it’s not too surprising that transportation and distribution costs have shot higher. For now, the energy shock is more a threat to corporate margins than to consumer prices, but the longer prices stay elevated, the more it will bleed through to the consumer,” Jacobsen said.
The dollar index, which measures the greenback against a basket of six leading currencies, rose 0.2% to 98.56 after hitting 98.601, its highest level since April 30, with the euro down 0.3% at $1.1702.
The strong producer prices reading came one day after an April reading of consumer prices posted its largest annual gain in three years. Markets have largely priced out any chance of a rate cut from the Federal Reserve this year, while expectations for a hike of at least 25 basis points at the central bank’s December meeting have climbed to 35.6%, according to CME FedWatch, up from 16.3% a week ago.
Trump-Xi summit
Trump and an entourage including Nvidia’s Jensen Huang and Elon Musk were greeted with a lavish welcome in Beijing on Wednesday as he prepared to ask Xi to “open up” to U.S. business at the start of their two-day summit.
The Chinese yuan strengthened 0.03% against the greenback to 6.789 per dollar after hitting 6.7852, its strongest level since February 2023.
In remarks made before he arrived in Beijing, Trump said he did not expect to need China’s help to end the war in Iran and ease Tehran’s grip on the Strait of Hormuz.
U.S. crude rose 0.3% to $102.46 a barrel and Brent fell to $107.51 per barrel, down 0.2% on the day, holding above the $100 level as a fragile ceasefire between the U.S. and Iran continued to hold, but the Strait of Hormuz remained effectively shuttered.
Trump said a ceasefire with Iran was “on life support” after Tehran rejected a U.S. proposal to end the war, further dampening expectations that a peace deal could be reached.
Weaker yen
The Japanese yen weakened 0.14% against the greenback to 157.82 per dollar. A sudden move on Tuesday had stoked speculation of a “rate check” by authorities, which is often a precursor to a currency intervention.
Japan’s recent foreign exchange intervention may have kept the yen from sliding below the 160-per-dollar mark, but is unlikely to have a lasting effect in propping up the sagging currency, former Bank of Japan Governor Haruhiko Kuroda said.
Sterling weakened 0.3% to $1.3496 as Keir Starmer faced his biggest challenge yet when his health minister was reported to be readying his resignation to try to trigger a contest to replace the British prime minister, who had sought some respite to set out his government’s agenda.
Original article: U.S. dollar rises as inflation jumps; Trump-Xi talks begin
