U.S. Dollar (DXY) Rebounds As PCE Price Index Exceeds Expectations
- U.S. dollar moved higher ahead of the weekend.
- Commodity-related currencies are under pressure.
- USD/JPY is moving towards the important 145 level.
U.S. Dollar Index Rebounds After Pullback
U.S. Dollar Index settled back above the 112 level and is trying to gain more ground as traders increase purchases of the American currency after the recent pullback.
Today, traders had a chance to take a look at Personal Income and Personal Spending reports from the U.S. Personal Income increased by 0.3% month-over-month in August, while Personal Spending grew by 0.4%.
PCE Price Index increased by 0.3% month-over-month in August, compared to analyst consensus of 0.1%. The higher-than-expected PCE Price Index report provided additional support to the American currency.
EUR/USD Pulls Back Below 0.9800
EUR/USD is moving lower after an unsuccessful attempt to get above the 0.9850 level. Currently, EUR/USD is trying to settle back below 0.9750.
Today, traders focused on the flash readings of the Euro Area inflation reports. The reports indicated that Euro Area Inflation Rate increased from 9.1% in August to 10% in September, compared to analyst consensus of 9.7%. Core Inflation Rate grew from 4.3% to 4.8%, compared to analyst consensus of 4.7%.
The reports show that inflation continues to grow at a robust pace. However, inflation data failed to provide additional support to EUR/USD as traders wanted to take some profits off the table amid rising geopolitical tensions.
GBP/USD Tests The 1.1200 Level
GBP/USD tested the 1.1200 level as the strong rebound continued. The final reading of the UK GDP Growth Rate report indicated that GDP grew by 0.2% in the second quarter, compared to analyst consensus which called for a decline of 0.1%. This report provided material support to the British pound.
From a big picture point of view, GBP/USD needs to settle above the 20 EMA near the 1.1250 level to continue its rebound. At this point, it looks that GBP/USD will not be able to gain sufficient upside momentum for this move ahead of the weekend.
Commodity-Related Currencies Retreat As Risk Appetite Declines
Commodity-related currencies remain sensitive to the dynamics of risk appetite. When demand for the safe-have dollar starts to increase, these currencies find themselves under pressure.
USD/JPY Stays Close To The 145 Level
USD/JPY continues to trade in a tight range below the 145 level. Fundamental reasons push USD/JPY higher. However, traders are worried that BoJ will intervene if USD/JPY crosses the 145 mark. Most likely, we’ll see a test of this level next week despite traders’ fears.
For a look at all of today’s economic events, check out our economic calendar.