Dollar Up Ahead of PCE Data

Personal Consumption Expenditure (PCE) Price Index numbers for the month of May are set to be released at 8:30 Eastern, with the headline year-over-year figure expected to print at 4.1% and the core year-over-year figure expected to print at 3.4%. Previous period figures were 3.8% and 3.3%, respectively. PCE numbers are the Federal Reserve's preferred measure of inflation, and a hotter-than-expected print would help support the case for an earlier rate increase. Traders are currently pricing in a greater than 80% chance of a rate hike at the Fed’s September meeting. Also due at 8:30 are final first quarter GDP numbers, Personal Income and Durable Goods figures for the month of May, and Initial Jobless Claims for the week ending June 20th.

EUR

The Euro is down against the Greenback this morning for the fourth day in a row and building bearish momentum. German Consumer Confidence numbers were released this morning and came in below Trader expectations, putting additional pressure on the currency. Policy divergence between the Federal Reserve and the European Central Bank continues to be a primary structural driver of weakness.

JPY

The Japanese Yen is down versus the Buck after Bank of Japan board member Naoki Tamura spoke this morning. Tamura acknowledged the need to hike interest rates further to avoid falling behind the curve but stated that he does not think it is necessary to rapidly increase the pace or sizing of hikes at this time. This has led to a paring of expectations for an imminent BoJ rate move. Tamura envisions steadily hiking at 25 bps intervals toward a 2% level, consequently narrowing the U.S.-Japan rate differential which has been a structural driver of Yen weakness.