Dollar steady as PCE data sets up June rate cut bets; yen in focus
dollar was broadly steady on Monday as data showing easing U.S. prices bolstered bets that the Federal Reserve could cut interest rates in June, while the yen loitered near 152 per dollar keeping traders on edge on the threat of intervention.
The personal consumption expenditures (PCE) price index rose 0.3% in February, the Commerce Department's Bureau of Economic Analysis said on Friday, compared with the 0.4% rise that economists polled by Reuters had forecast.
The report also showed consumer spending rising by the most in just over a year last month, underscoring the economy's resilience. Most markets across the globe were closed on Friday.
Federal Reserve Chair Jerome Powell on Friday said the latest U.S. inflation data was «along the lines of what we would like to see,» in comments that tallied with his remarks after the Fed's policy meeting last month.
Markets are now pricing in 68.5% chance of the Fed cutting rates in June versus 57% chance at the end of last week, the CME FedWatch tool showed. Traders are also pricing in 75 basis points of cuts this year.
Citi strategists said the Fed remains on track to begin cutting rates in June. «If activity holds up, the Fed might deliver three rate cuts this year. But a further softening in labour markets has us expecting five rate cuts this year.»
The euro was 0.06% higher at $1.07945, hovering near its more-than-one-month low of $1.0769 touched last week. Sterling was at $1.2637, up 0.12% on the day.
The dollar index, which measures the U.S. currency against
