Dollar Strengthens as US Inflation Expectations Rise
The US dollar strengthened on Wednesday after new economic data from the Commerce Department was released. The Personal Consumption Expenditures Price Index rose 3.7% in the 12 months through July, matching expectations but above the 3.6% estimate of economists polled by Reuters.
On a month-over-month basis, PCE increased 0.2%, beating the forecast for a 0.1% rise after falling 0.1% in June.
George Vessey, lead FX and macro strategist at Convera in London, noted that while the data wasn't strong enough to give either hawks or doves a clear victory, it nudged expectations for a rate hike from the Federal Reserve slightly higher ahead of the Jackson Hole symposium of central bankers.
The dollar index rose 0.24% to 99.145 and was on pace for its biggest daily gain since August 6, with the euro down 0.18% at $1.1653.