July’s US headline PCE inflation rose 0.2% month-over-month, surpassing expectations and bolstering the USD against the GBP.
GBP/USD fell to 1.3603, a five-day low, after US headline PCE inflation data for July exceeded forecasts. The index rose 0.2% month-over-month, reversing June’s 0.1% decline and topping the 0.1% estimate.
Annual headline PCE held at 3.7%, above the 3.6% consensus, while core PCE matched expectations at 0.2% MoM and 3.3% YoY. The data reinforced the USD’s rebound, lifting the DXY index by 0.20% to 99.12.
Despite the hotter headline readings, traders maintained Fed rate cut expectations, focusing on in-line core inflation and moderating CPI and PPI figures.