US Dollar fell as hawkish ECB comments weighed on the DXY.
US Dollar (USD) is turning green just ahead of the US opening bell, as Personal Spending data revealed that consumers are beginning to spend more than they earn. Earlier this Friday, statements from European Central Bank Executive Board member Isabel Schnabel gave European trading a hawkish tone. Although recent numbers in the Eurozone may hint to disinflation, ECB’s Schnabel stated that the idea of a few consecutive rate cuts is not on the table because the ECB needs to Be cautious. This increased the Euro’s (EUR) value versus the US Dollar. However, the relatively significant expenditure component may still weigh in and push the US Dollar higher once the European session ends.
Traders expect PCE to be predictable.
The US Dollar Index rose above 101.00 and remained there.
The US Dollar Index rose above 101.00 and remained there.
The primary economic data point for this Friday, the core Personal Consumption Expenditures (PCE) Price Index, the US Federal Reserve’s preferred inflation indicator, contained no new features. All PCE components, including Personal Spending (+0.5%), declined in line. Only a few datapoints remain, including the Chicago Purchase Managers Index (PMI) number and the University of Michigan’s final estimate for August Consumer Sentiment.
Daily digest market movers: Consumers spend like it’s 1999.
During early Asian trade, the Chinese The offshore Yuan touched its highest level versus the US Dollar since June 2023, trading at 7.0710 USDCNH.
The Personal Consumption Expenditure (CPE) data for July issued at 12:30 GMT.
The headline PCE increased from 0.1% to 0.2% in July, as expected. The annual rate stayed constant at 2.5%.
The monthly core PCE remained constant at 0.2% in July, while the annual component remained unchanged at 2.6%.
Personal Income climbed at a steady 0.3%.
Personal Income climbed at a steady 0.3%. While Personal Spending increased from 0.3% to 0.5%.
At 13:45, the Chicago Purchase Managers Index for August will be reveale. The prior value was 45.3, indicating contraction. The August figure is expected to remain in contraction at 45.5.
The last data on this Friday will be definitive. According to University of Michigan data for August, consumer sentiment is anticipated to rise from 67.8 to 68.
The 5-year inflation forecast should remain constant at 3%.
European shares have a decent chance of closing in the green this Friday, while US equities are rising ahead of the open.
The CME Fedwatch Tool predicts a 67.5% chance of a 25 basis point (bps) interest rate drop by the Fed in September, against a 32.5% possibility of a 50 bps cut. Another 25 bps decrease (assuming September is a 25 bps drop) is projected in November by 48.4%, with a 42.4% possibility that rates would be 75 bps (25 bps + 50 bps) below present levels and a 9.2% probability that rates Being 100 (25 + 75) basis points lower.
The US 10-year benchmark rate trades at 3.87%, close to its weekly peak of 3.87%.
https://voiceoftraders.com/analysis/eurusd-remains-below-1-1100-as-eurozone-inflation-falls
