Dollar Mixed Ahead of PCE
The U.S. Dollar is trading in a mixed range ahead of August Personal Consumption Expenditures (PCE) numbers, due to be released at 8:30am.
PCE is the Federal Reserve’s preferred measure of inflation, and should numbers come out hotter than anticipated then Traders are likely to increase bets that the Fed will hike interest rates at their October meeting, boosting the Dollar. The Fed is currently expected to hike interest rates by year end, but most Traders are anticipating that it will come at the December meeting at time of writing. Core PCE month-over-month is expected to come in at 0.3%, up from the previous month’s figure of 0.2%, while the core year-over-year figure is expected to remain stable from the previous reading at 3.3%.
What to Watch This Week…
- Non-Farm Payrolls - Friday 8:30 am
- USA Online is always open
The complete Economic Calendar is available here.
JPY
The Japanese Yen is up against the Buck this morning on quarter-end rebalancing flows. The Yen has appreciated more than 3% this month, marking its best monthly performance since July 2024. The Bank of Japan announced this morning that it will reduce its bond purchases for the October through December period to JPY 2.3 trillion (USD ~14.6 billion), a reduction of JPY 200 billion. This behavior aligns with a multi-year monetary tightening plan, similar to how they are slowly hiking interest rates, and both are structurally supportive of the Yen.
GBP
The British Pound is the G10’s top performer this morning following the release of the United Kingdom’s final Gross Domestic Product (GDP) figures for the second quarter of the year. The release showed that the U.K. economy grew by 0.5% in Q2, versus the 0.4% that was expected. This also lifted the year-over-year growth figure to 1.4%, beating the expectation of 1.2%. Sterling got an additional boost on comments from Prime Minister Andy Burnham where he suggested that the U.K. could rejoin the European Union.