29.08.202501:22:46UTC+00Dollar Steadies Ahead of PCE Inflation Data

On Friday, the dollar index steadied around 97.9, halting its recent downturn as investors anticipated the release of the latest Personal Consumption Expenditures (PCE) price index. This index is the Federal Reserve's favored measure for assessing inflation and could provide new guidance for monetary policy. Expectations are set for the Core PCE to rise by 2.9% year-on-year in July, marking its fastest growth in five months. Revised figures disclosed on Thursday indicated that the U.S. economy experienced a slightly faster growth rate in the second quarter, buoyed by increased business investment and trade. Additionally, on Thursday evening, Federal Reserve Governor Christopher Waller expressed his endorsement of commencing interest rate cuts next month, indicating he "fully expects" further reductions to align monetary policy more closely with a neutral stance. Throughout August, the dollar index is projected to decline by over 2% as traders increase speculation on Federal Reserve rate cuts, with market calculations now suggesting an 86% probability of a 25 basis-point decrease in September. The dollar recorded its steepest monthly losses against the euro, British pound, and Japanese yen.