The Bureau of Economic Analysis (BEA) issue the Core Personal Consumption Expenditures (PCE) Price Index data from the United States. Which is the Federal Reserve’s (Fed) preferred inflation gauge.
The change in the Personal Consumption Expenditures (Core PCE) Price Index in the United States increased to 4.4% on an annual basis in April, up from 4.2% in March, according to the US Bureau of Economic Analysis on Friday. This number was higher than the market’s forecast of 3.9%.
The annual PCE Price Index, the Federal Reserve’s preferred measure of inflation, increased to 4.7% from 4.6% in the same period, above experts’ expectations of 4.6%.PCE inflation and PCE inflation both climbed 0.4% month on month.
Personal income increased 0.4% on a monthly basis, while personal spending increased 0.8%, according to the data.
Core PCE reaction on market
The US Dollar Index staged an immediate reaction. a bounce from session lows. And was last noted at 104.10, down 0.1% on the day.
The US Dollar (USD) pares some of its intraday losses. As a result of higher Personal Consumption Expenditure (PCE) Price Index data. Which works as a headwind for the AUDUSD pair.
The Fed’s preferred inflation indicator – also came in higher than consensus predictions, reaffirming speculation that the Federal Reserve (Fed) will hold interest rates higher for longer, lending some support to the US dollar.
Meanwhile, hawkish Fed views cause a new leg higher in US Treasury bond rates. Which, combined with the cautious mindset, favors the safe-haven greenback and adds to restraining the risk-sensitive Aussie. This helps to compensate for the poor announcement of US Durable Goods Orders data, which decreased by 0.6% in April.
