US Dollar: Inflation data supports gains – UOB

UOB Global Economics & Markets Research reports that the US PCE inflation for July slightly exceeded expectations, resulting in an increase in US Treasury yields and supporting the US Dollar against most G10 currencies. The DXY index posted its largest daily gain in nearly four weeks, retracing about half of its prior losses, as markets remain hopeful that the Federal Reserve could resume rate hikes before year-end.

The headline PCE price index rose 0.2% m/m in July, surpassing economists' expectations of a 0.1% increase, while core PCE increased 0.2% m/m and 3.3% y/y, aligning with market expectations.

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