Rising U.S. Treasury yields lifted the USD, while July core PCE inflation held steady at 3.3% year-over-year, aligning with expectations.
The USD strengthened against most major currencies as U.S. Treasury yields rose, with the 5-year note auction drawing a high yield of 4.393%. The greenback’s gains were broad-based, though the Australian dollar bucked the trend with a modest 0.18% rise. The NZD, CHF, and GBP underperformed amid the shift in sentiment.
U.S. economic data showed mixed signals, with July core PCE inflation matching forecasts at 3.3% year-over-year and 0.2% month-over-month. Personal income and spending also exceeded expectations, while durable goods orders rose 1.1%, outpacing the 0.5% estimate. The Dallas Fed’s Trimmed Mean inflation gauge accelerated to 2.2% from 1.5% the prior month.
Markets remained cautious ahead of key events, including Nvidia’s earnings report and the Jackson Hole symposium. European indices closed mostly higher, though the UK’s FTSE 100 lagged. Crude oil futures settled near flat at $82.23, despite a smaller-than-expected build in U.S. inventories.