BREAKING: EURUSD gains after lower PCE data 📌

01:30 PM BST, United States - Inflation Data for August:

• PCE price index: actual 0.1% MoM; forecast 0.2% MoM; previous 0.2% MoM;
• PCE Price index: actual 2.2% YoY; forecast 2.3% YoY; previous 2.5% YoY;
• Core PCE Price Index: actual 0.1% MoM; forecast 0.2% MoM; previous 0.2% MoM;
• Core PCE Price Index: actual 2.7% YoY; forecast 2.7% YoY; previous 2.6% YoY;
• Personal Income: actual 0.2% MoM; forecast 0.4% MoM; previous 0.3% MoM;
• Personal Spending: actual 0.2% MoM; forecast 0.3% MoM; previous 0.5% MoM;
• Real Personal Consumption: actual 0.1% MoM; previous 0.4% MoM;

In August 2024, U.S. personal income rose by $50.5 billion (0.2%), with disposable personal income increasing by $34.2 billion (0.2%) and personal consumption expenditures (PCE) up $47.2 billion (0.2%). The PCE price index grew modestly by 0.1%, indicating stable inflation, while real disposable income and real PCE both increased by 0.1%. Spending on services, particularly housing and financial services, drove the rise in PCE, offsetting a decline in goods spending, mainly in new motor vehicles. The personal saving rate stood at 4.8%, with personal saving totaling $1.05 trillion.

The data come in as expected for the core measure and slightly below expectations for headline inflation. The report should support further rate cuts by the Fed and the likelihood of a 50bp cut is likely to be raised soon. However, the key for markets and the Fed will be next week's labor market reports.