US Dollar Gains on Fed Rate Hike Expectations After Strong Economic Data

The US dollar gained strength on Wednesday following the release of US economic data, which slightly increased expectations for a rate hike by the Federal Reserve before its Jackson Hole symposium this week.

The Commerce Department reported that the Personal Consumption Expenditures Price Index rose 3.7% in the 12 months through July, matching June's figure and surpassing economists' estimates of 3.6%. On a month-over-month basis, PCE increased 0.2%, exceeding the estimated 0.1% increase after falling 0.1% in June.

Personal income rose by $115.1 billion (0.4 percent at a monthly rate) in July, according to estimates from the US Bureau of Economic Analysis (BEA). Disposable personal income increased $125.9 billion (0.5 percent), and personal consumption expenditures rose $36.3 billion (0.2 percent).