US dollar turns softer on cooling consumer spending data
THE dollar index was lower on Friday (Jun 30) following two straight days of gains, after economic data showed a cooling in consumer spending, raising some doubt about the potential aggressiveness of the Federal Reserve in fighting inflation. US Treasury yields were also mostly lower after the data.
The Commerce Department said consumer spending ticked up 0.1 per cent in May while data for the prior month was revised to show spending accelerated by 0.6 per cent versus the previously reported 0.8 per cent. The personal consumption expenditures (PCE) gained 0.1 per cent for the month after an 0.4 per cent rise in April while advancing 3.8 per cent on an annual basis, slowing from a revised 4.3 per cent the prior month. But the PCE gauges were still well above the Fed’s 2 per cent inflation target.
The dollar index fell 0.426 per cent to 102.880 and was virtually unchanged on the week. The index had risen 0.82 per cent over the prior two sessions after comments from Fed chair Jerome Powell and solid economic data.
The dollar index is up 0.3 per cent for the quarter and is poised to snap a streak of back-to-back quarterly declines. For the first half, the greenback is off 0.6 per cent.
The Japanese yen strengthened 0.35 per cent and was on track to snap a three-day run of weakening against the greenback at 144.26 per dollar. The greenback is up nearly 9 per cent for the quarter against the yen, which would mark its strongest in a year.
In contrast, eurozone inflation data fell for a third consecutive month, but showed a small drop in underlying inflation and was unlikely to keep the European Central Bank from hiking rates at its July meeting. The euro was up 0.43 per cent at US$1.0911 while sterling was last trading at US$1.2695, up 0.66 per cent on the day.
Data showed Britain’s economy grew by just 0.1 per cent in the first quarter, as inflation sapped disposable income in households. REUTERS
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