Markets brace for US PCE inflation figures at 8:30am EST, seen as key to Fed policy outlook amid rising oil prices.
The US Dollar Index (DXY) climbed to 101.60, its highest level in a year, as traders awaited May’s Personal Consumption Expenditures (PCE) Price Index. The Fed’s preferred inflation gauge is set for release at 8:30am EST Thursday, with markets assessing whether recent oil price spikes have fed into core inflation.
Economists expect the data to provide clarity on inflation trends, following mixed signals from other indicators. US Treasury yields are likely to see heightened volatility post-release, reflecting shifting rate-cut expectations. The Dollar strengthened broadly, outperforming the New Zealand Dollar and pushing EUR/USD toward a one-year low near 1.1360.
Despite hawkish remarks from ECB’s Isabel Schnabel, the Euro failed to gain traction, hovering near session lows around 1.1325. Schnabel indicated more rate hikes may be needed to tame inflation, though markets remain focused on US data.