- USD / JPY was under downward pressure in the first American session.
- Core PCE inflation in the US increased to 3.4% (YoY) in May as expected.
- The US Dollar Index remains in negative territory below 91.70.
After spending the first half of the day in a relatively tight range below 111.00, the pair USD/JPY it lost its traction early in the US session and fell to a new daily low of 110.50. At time of writing, the pair was down 0.25% on the day at 110.58.
Inflation fears subside after PCE price index data
Data released by the U.S. Bureau of Economic Analysis revealed on Friday that the Basic Personal Consumption Spending (PCE) Price Index, the Fed’s preferred gauge of inflation, rose to 3.4% annually in May from 3.1 %. Although this reading was in line with the market consensus, the USD lost interest. Reflecting renewed USD weakness, the US Dollar Index was down 0.16% on the day to 91.67.
Meanwhile, other US data showed that personal income contracted 2% in May and personal expenses were unchanged on a monthly basis.
Later in the session, the University of Michigan will release its final estimate of the Consumer Sentiment Index for June.
Meanwhile, the major Wall Street indices are still on track to open modestly higher after the inflation report, suggesting that the dollar could struggle to gain strength in the second half of the day.
Technical levels
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