Dollar Rises as PCE Data Keeps Traders on Edge About Fed Rate Outlook

The US dollar strengthened on Wednesday after mixed inflation data from July kept traders uncertain about the Federal Reserve's interest rate path. The PCE, or core personal consumption expenditures price index, rose by 0.2% month-over-month and 3.3% year-over-year, matching expectations.

The BEA's second estimate of US real GDP growth for Q2 was unchanged at 1.5%, in line with the consensus estimate. New orders for manufactured durable goods improved 1.1% in July, outperforming the anticipated rise of 0.4%.

With this data painting a picture of a resilient economy and sticky inflation, the Fed gains breathing room to keep interest rates steady while evaluating more incoming indicators. The odds of the central bank standing pat in September rose to nearly 64% from about 60% a day ago.