Strong US Data Pushes Dollar Higher Amid Euro-Pound Correction
The US dollar rebounded following strong economic data from the United States, causing the euro and pound to retreat from their recent highs.
The Personal Consumption Expenditures (PCE) price index accelerated to 3.7% year-on-year, exceeding expectations of 3.6%, while the quarterly core PCE reading came in at 3.6%, above the forecast of 3.4%. The dollar also received support from stronger consumer activity, with personal spending increasing by 0.2%, versus expectations of 0.1%, and personal income rising by 0.4%, double the forecast of 0.2%.
The revised US GDP growth for the second quarter came in at 1.5%, matching market expectations. The data suggests that the US economy remains resilient, reducing the likelihood of the Federal Reserve shifting towards a more accommodative monetary-policy stance.