The dollar rises after stable growth in consumer spending index

The US consumer spending index stabilizes during March.

By Raed Alkhedr | @raedalkhedr | 28 April 2023

  • Oil rises from levels of $74 per barrel.

  • The dollar index rises to levels of 101.80.

  • The personal consumption expenditure index rises by 4.6%.

The preferred Federal Reserve inflation measurement index stabilizes during March

Recent data showed stable growth in the personal consumption expenditure index on an annual basis, at a rate of 4.6%. This is the index closely monitored by the Federal Reserve to assess inflation. On a monthly basis, it rose by 0.3%. Including food and energy, the consumer spending price index rose by 0.1% compared to the previous month in March, as expected, and decreased from an increase of 0.3% in the previous month. On an annual basis, the consumer spending price index rose by 4.2%, also in line with consensus, and slowed from a rate of 5.1% in February.

On Thursday, US GDP growth for the first quarter slowed by 1.1% more than expected, but the core personal consumption expenditure index rose more than expected.

Oil rises from levels of $74 per barrel

Oil continues to recover for the second consecutive session amid improved investor sentiment about the US banking crisis. Despite these increases, oil is on track to incur its second consecutive weekly loss. These losses come against the backdrop of concerns about the global economic recession, which could harm fuel demand levels. In trading, West Texas Intermediate crude saw a limited increase in the last session of the week, trading near levels of $75 per barrel, while Brent crude rose near levels of $78 per barrel.

The dollar rises after inflation data

The US dollar index witnessed a slight increase after the release of the Federal Reserve's preferred inflation measurement index data, showing a slowdown, but slightly higher than expected and slightly lower than the previous reading, which supported expectations of continued tight monetary policy by the Federal Reserve and a renewed interest rate hike at the upcoming meeting. This strengthened the stability of the US dollar index, which is trading near levels of 101.84 points.