Dollar down, PPI up


The Labor Department said today in Washington that so- called core prices increased 0.4 percent from March, bringing the year-on-year gain to 3 percent, the biggest since December 1991

Speaking of funky statistics, this doesn't include fuel and food.

Middle East decoupling from US dollar

Pressure mounts to drop dollar peg:

Gulf-based analysts point out that most of the currencies of the GCC are undervalued against the dollar, based on their current-account balances, inflation and costs of goods and services. The UAE dirham was undervalued by 10-15 per cent and the Saudi riyal by 25-30 per cent, according to a report by Deutsche Bank AG.
"The dollar peg prevents nominal appreciation. Since the dollar itself has been falling, the result is rising domestic inflation. Some Gulf economies now have inflation rates of around 10 per cent," analysts said. Markets piled pressure on Gulf currencies last year as speculation mounted that more GCC countries would follow Kuwait and abandon links to the weak dollar partly to curb imported inflation.