USD Choppy After Mixed PCE Data – TD Securities

TD Securities strategists report that US rates markets experienced steepening following a softer-than-expected headline Personal Consumption Expenditures (PCE) Price Index. However, the picture for the US dollar became more complex due to stronger personal income and spending figures released simultaneously.

The mixed data has introduced choppiness in dollar trading, as market participants weigh the implications for Federal Reserve policy. The weaker inflation reading suggests easing price pressures, but robust income and spending point to resilient economic activity, leaving the near-term outlook for the dollar uncertain.