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Dollar Index rises after hotter-than-expected PCE inflation data

PCE prices were 3.7% year over year versus a 3.6% consensus, with the Dollar Index trading just above 99.0 and earlier topping near 99.25.

Reported · Written up by our desk · Major Pairs

The Dollar Index is trading just above 99.00, up about 0.25%, after printing a session high just short of 99.25 and not retesting that level since, according to an FXStreet market note.

The move followed the release of Personal Consumption Expenditures, with headline PCE prices running 3.7% over the year against a 3.6% consensus. FXStreet said the reaction reflects markets recalibrating the timing of Federal Reserve tightening rather than taking a new view that forces the end of the current range.

The same note highlighted that September 16 pricing is at 40.1% for an increase versus 59.9% for a hold, while October 28 implies a 64.5% cumulative probability. It also said December 9 carries no probability that the 3.50% to 3.75% range survives the year, leaving one increase fully priced.

FXStreet added that the Dollar Index’s prior dip toward 98.50 came after the Treasury Department expanded its buyback program for long-dated debt to help hold borrowing costs down, and that today’s rebound recovers roughly half of that earlier move. The note attributed the chart action to a reaction to the inflation number and pointed to a short time window in intraday trading after the 12:30 GMT bid arrived.

Latest closeDollar index 99.64 ▼0.3%

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