US Dollar Slips as Inflation Stalls, Markets Eye Fed Rate Cuts

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.