The biggest surprise from US economic indicators came from personal spending, that dropped 0.1% instead of rising by 0.2% as expected. This is the first fall since January. Personal income also disappointed by rising only 0.2% and the Core PCE Price Index did not surprise and rose by 0.1% once again.
The US dollar is ticking lower following these numbers.
The US Core PCE Price Index was expected to rise by a modest 0.1% in July, after +0.2% in June. Year over year, June saw a rise of 1.6%. This is a key indicator for the Fed: Yellen and co. see this as a primary measure of inflation, giving a better indicator than CPI, Core CPI and other measures. More indicators were released at the same time.
Before the publication, EUR/USD was trading just under 1.3190, GBP/USD was around 1.6580 and USD/JPY just under 104.
The US dollar dropped just a bit: EUR/USD rose above 1.3190, GBP/USD ticked lower and USD/JPY moved away from 104.
- Core PCE Price Index: +0.1%, year over year +1.5%, +0.1% m/m expected.
- Personal Spending: -0.2%, +0.2% m/m expected.
- Personal Income: +0.2%, exp. +0.2%.
We still have two more important US indicators today:
- The Chicago PMI, which is expected to rise to 55 points.
- Revised consumer sentiment by the University of Michigan. The initial figure showed 80.1 points.
There are much more important events in the first week of September. Listen to our podcast and get ready:Get the 5 most predictable currency pairs