US dollar rebounds with PCE data release

The dollar rises with support from economic data

By Laila Eid | @Laila Eid | 31 August 2023

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  • Core PCE price index shows year-on-year increase

  • Decrease in unemployment claims in the US

  • Slight decline in gold prices

Significant economic data released from the US economy

The Core Personal Consumption Expenditure Price Index has been released, showing a rise of 4.2% in July, matching expectations and compared to the 4.1% recorded in June. The index experienced a monthly increase of 0.2%, consistent with the reading from June. Additionally, Personal Income data indicated a decline to 0.2% from the previous 0.3%. Moreover, the Monthly Spending Index showed an increase of 0.8% after adjustment, up from the previous 0.6%.

On another note, data regarding Unemployment Benefit Applications in the United States for the week ending August 26th showed 228 thousand new applications. This result pleasantly surprised expectations that predicted 236 thousand applications. This is a positive change compared to the prior week ending August 19th, which recorded 232 thousand applications. Following the release of the Fed's preferred inflation figures, the US Employment Report from the US Bureau of Labor Statistics is scheduled for release on Friday. Expectations indicate that the unemployment rate will remain unchanged at 3.5%

The US dollar gains ground following release of inflation data

In today's trading, the US dollar demonstrated an upward trend as the core PCE price index was made public. This rise comes after enduring losses for three consecutive sessions. As of the time of this report, the dollar has strengthened by 0.50%, positioning itself for a total gain of 1.80% after experiencing a decline over the past two months. However, the currency exhibited poor performance during yesterday's trading session. This decline was prompted by the initial reading of GDP growth for the second quarter of 2023, which revealed a slowdown exceeding expectations. Conversely, gold experienced a slight decrease on Thursday, dropping from the $1945 level to $1943 per ounce