Forex News: U.S. Dollar Drops After PCE Inflation Data

U.S. Dollar Drops After PCE Inflation Data

(RTTNews) - The U.S. dollar weakened against its major counterparts in the New York session on Friday, following the release of PCE inflation data for February.

Data from the Commerce Department showed that U.S. consumer prices increased in line with economist estimates in the month of February, although core consumer prices rose by slightly more than expected.

The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.3 percent in February, matching the increase seen in the two previous months as well as economist estimates.

The annual rate of growth by the PCE price index was 2.5 percent in February, unchanged from January and in line with expectations.

Meanwhile, the report said the core PCE price index, which excludes food and energy prices, climbed by 0.4 percent in February after rising by 0.3 percent in January. Economists had expected another 0.3 percent increase.

The annual rate of growth by the core PCE price index also accelerated to 2.8 percent in February from an upwardly revised 2.7 percent in January.

Economists had expected the year-over-year growth by the core PCE price index to tick up to 2.7 percent from the 2.6 percent originally reported for the previous month.

The Federal Reserve's preferred readings on consumer price inflation were included in the Commerce Department's report on personal income and spending.

The data supported expectations that the Fed will keep interest rates steady for a longer period.

The greenback fell to 4-day lows of 1.0844 against the euro and 0.8799 against the franc. The currency is poised to challenge support around 1.10 against the euro and 0.86 against the franc.

The greenback weakened to a 2-day low of 149.85 against the yen, from an early more than 3-week high of 151.20. If the currency falls further, it is likely to test support around the 144.00 region.

The greenback retreated to 0.5736 against the kiwi and 1.4276 against the loonie, off its early 3-day highs of 0.5711 and 1.4333, respectively. The currency is likely to locate support around 0.60 against the kiwi and 1.37 against the loonie.

The greenback eased to 1.2967 against the pound after the data. The currency may challenge support around the 1.31 level.

The greenback pulled back to 0.6311 against the aussie. The currency is seen finding support around the 0.65 level.

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