Home›Forex›Major Pairs›Pound slides to five-day low versus US dollar after PC…

Pound slides to five-day low versus US dollar after PCE data

GBP/USD was last around 1.3603, down about 0.33% on the day, as the hotter-than-expected headline PCE helped the US dollar regain ground without changing Fed rate expectations.

Reported · Written up by our desk · Major Pairs

FXStreet reports GBP/USD fell to a five-day low on Wednesday after traders reacted to the latest US Personal Consumption Expenditures, or PCE, Price Index readings. At the time of writing, the pair traded around 1.3603, down roughly 0.33% for the day.

The headline PCE Price Index rose 0.2% month over month in July, topping the 0.1% forecast, and it reversed June’s 0.1% decline. On an annual basis, headline inflation held steady at 3.7%, slightly above expectations of 3.6%, while the core PCE, the Fed’s preferred measure, increased 0.2% month over month, matching forecasts and holding annual core inflation at 3.3%.

According to FXStreet, the stronger headline readings helped the US dollar recover some ground after recent weakness, which had been linked to a surprise announcement that the US Treasury would increase buybacks of longer-dated government securities. The US Dollar Index, or DXY, was near 99.12, up about 0.20% on the day.

FXStreet also said the data did not materially shift expectations for the Fed’s September meeting because traders focused more on the in-line core readings. CME FedWatch Tool pricing showed a 65% chance the Fed would keep rates unchanged, and FX attention was set on Fed Chair Kevin Warsh’s Jackson Hole speech on Friday for further guidance.

Latest closeGBP/USD 1.354 ▲0.3%|Dollar index 99.64 ▼0.3%

More like this

Sources