Dollar Edges Higher After Mixed PCE, Spending Data
A Bloomberg gauge of the dollar edged higher in choppy trade after the release of mixed personal spending and consumer inflation data. Group-of-10 currencies traded in tight ranges amid month-end investment flows.
The Bloomberg Dollar Spot Index rises 0.1%; measure set for 1.7% drop in June, its sixth month of declines, longest run of monthly losses since 2017.
Dollar briefly hit session low before turning higher as the market digested consumer spending, income data that trailed estimates, while inflation readings came in stronger than expected.
Core PCE MoM at 0.2% in May (0.1% expected); personal income at -0.4% (0.3% forecast).
“The uptick in May inflation readings will keep the Fed on hold in July, but further softening of the real sector should tee up a September cut,” said Win Thin of Brown Brothers Harriman.
The US could wrap up the administration’s agenda for trade agreements by Labor Day, Treasury Secretary Scott Bessent said.
Separately, China said it has further confirmed details of a trade framework with Washington.
Treasuries slip across the curve; 10-year yield rises 3.5bp to 4.28%.
Euro leads G-10 currencies amid muted options flows; EUR/USD up 0.1% to 1.1715, gaining for a seventh day; pair up 3.2% in June
“Price action suggests that short USD positioning is not yet crowded but the EUR/USD rally looks technically overbought,” wrote Bank of America currency strategists including Adarsh Sinha and Abhay Gupta Friday. “The latter stages of a euro rally are often choppier in contrast to the first two thirds that tend to be fast and furious”
Inflation inched higher in France and Spain, but not enough to concern European Central Bank officials who are optimistic that their 2% target will be met sustainably this year
Read more: Euro Poised for Best Run Since 2017 as Traders Target $1.20
Yen underperforms G-10 on session amid rise in US yields; USD/JPY rises 0.3% to 144.84
USD/CAD gains 0.1% to 1.3659
Loonie pressured after Canada April GDP figures come in at -0.1% MoM (0.0% expected)
GBP/USD slips 0.1% to 1.3712; USD/CHF steady at 0.7999
Source : Bloomberg
