US Dollar Index drops 0.3%, stable inflation impacts rate cut expectations. PCE price index unchanged; FED futures imply 67% chance of easing in September.
Published on 3 July 2024
1 minute read
Here’s this week’s overview of the US Dollar:
In the past week, we saw the US Dollar Index decline by 0.3% against a trade weighted basket of its peers.
Data showed the U.S. PCE price index, the Fed's preferred inflation measure, was unchanged last month, following an unrevised 0.3% gain in April. In the 12 months through to May, the PCE price index increased 2.6% after advancing 2.7% in the year to April.
Following the inflation data, FED futures markets slightly raised their implied estimate of the chances of easing in September to around 67%, from about 65% late on Thursday. The market is also pricing between one to two rate cuts of 25 bps each this year.
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