USA Dollar

Dollar Index Jumps as Traders Brace for Fed’s Preferred Inflation Measure — TradingView News

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PCE inflation data is coming in hot and the greenback powered higher to cross 104.50.

Key Points:

  • Dollar index crosses 104.50.
  • PCE data on traders’ radars.
  • US and Europe take a break.
  • The US dollar index DXY marched higher on Thursday and early Friday as forex speculators were eager to get the latest from the US economy. On deck for release later today is the Federal Reserve’s preferred inflation measure. PCE, short for personal consumption expenditures, is expected to show prices in February increased by a cool 2.8% for the past twelve months, in line with January’s pace of growth.
  • Why’s the PCE favored by the Fed? It’s a more broad-based gauge of prices across the economy as it excludes the more volatile sectors food and energy. Another reading below the 3% handle will indicate a sustained cooldown of prices and will further boost investor convictions of three rate cuts coming in 2024. Vice versa, a hot number will suggest that the inflation genie is not yet back in the bottle.
  • In that context, the US dollar crossed 104.50 late yesterday and is now floating near unchanged levels. Currency markets are bound to get less volume and lower volatility with both the US and Europe taking a break for Good Friday. The US is back in action on Monday while European bourses will open for trading on Tuesday.

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