May PCE inflation matched forecasts, easing pressure on the Fed to raise rates despite annual inflation exceeding its 2% target.
The Swiss Franc strengthened against the US Dollar on Friday, with USD/CHF dropping to 0.8071 after US Personal Consumption Expenditures (PCE) data aligned with expectations. The pair erased weekly gains, extending losses for a second day following an 11-month high of 0.8139 on Wednesday.
Headline PCE rose 0.4% month-over-month in May, unchanged from April but below the 0.5% forecast. Core PCE held steady at 0.3%, matching consensus. The US Dollar Index (DXY) retreated to 101.12 after nearing a one-year peak earlier in the week.
Traders now see reduced odds of an immediate Fed rate hike, though annual inflation remains above the 2% target. Policymakers, including Chicago Fed President Austan Goolsbee, emphasized inflation is still too high, leaving the door open for future tightening.