12:32 PM · 31 March 2023

BREAKING: USD drops after soft PCE data

USD/JPY
Forex
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The US data pack for February, including PCE inflation data, was released today at 1:30 pm BST. PCE data turned out to be softer than expected with headline measure dropping from 5.4 to 5.0% YoY (exp. 5.1% YoY). Core gauge also decelerated - from 4.7 to 4.6% YoY - while market expected it to stay unchanged. Personal spending data missed expectations slightly, while personal income turned out to be slightly better than expected.

US, data pack for February

  • Headline PCE: 5.0% YoY vs 5.1% YoY expected (5.4% YoY previously)
  • Core PCE: 4.6% YoY vs 4.7% YoY expected (4.7% YoY previously)
  • Personal Income: 0.3% MoM vs 0.2% MoM expected (0.6% MoM previously)
  • Personal Spending: 0.2% MoM vs 0.3% MoM expected (exp. -0.1% MoM previously)

Market reaction to the release can be seen as dovish - USD pulled back while equities gained. EURUSD jumped back towards 1.09, USDJPY dropped below 133.00 mark and US500 is testing 4,100 pts area.

USDJPY at H1 interval. Source: xStation5

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