The pair has risen about 30 pips since the US released PCE data for May. The report showed slightly hotter core inflation than anticipated while spending/income both unexpectedly deteriorated. That's the kind of data that could be put the Fed in a bind. If the economy is slowing it calls for rate cuts but the Fed can't lower rates if inflation is also creeping up and remains above target.
Notably, this isn't the first sign of consumer softening this year. Target last month highlighted a weakening consumer and yesterday, Circle-K owner Couche-Tard highlighted a struggling US consumer in the 'lower end' and 'lower middle end'.
To be fair, many other companies have said the consumer is fine but this week's US Q1 GDP report also showed a weaker consumer.
This article was written by Adam Button at www.forexlive.com. Read More Details
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