The US dollar on fluctuated, but remained essentially unchanged against a basket of world currencies after two days of gains, as market participants weighed the probability of interest rates rising further and staying there longer than many might have hoped.
The personal consumption expenditures (PCE) price index rose 0.1 percent last month after climbing 0.4 percent in October. In the 12 months through last month, it increased 5.5 percent after advancing 6.1 percent in October.
Excluding the volatile food and energy components, the PCE price index gained 0.2 percent after increasing 0.3 percent in October.
Photo: EPA-EFE
The so-called core PCE price index rose 4.7 percent on a year-on-year basis last month after increasing 5 percent in October.
The Fed tracks the PCE price indices for monetary policy.
Erik Bregar, director of FX and precious metals risk management at Silver Gold Bull in Toronto, said there was “no real positive surprise to the inflation data,” adding that the numbers came in roughly in line with expectations.
“The data will feed the narrative that the Fed will keep rates tight for longer,” he said.
The yen weakened 0.36 percent versus the greenback at ￥132.85 per US dollar, while sterling was last trading at US$1.2045, up 0.02 percent on the day.
The dollar index fell 0.11 percent, with the euro up 0.22 percent at US$1.0616.
The New Taiwan dollar shrank against the US dollar, losing NT$0.032 to close at NT$30.712 — a 0.0065 percent decline from NT$30.710 a week earlier.
A second report on Friday showed that new orders for US-made capital goods rose moderately last month, while shipments fell, pointing to a slowdown in business spending on equipment this quarter as higher borrowing costs cool demand for goods.
Orders for nondefense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.2 percent last month, data showed.
These so-called core capital goods orders increased 0.3 percent in October.
However, shipments of core capital goods dipped 0.1 percent after increasing 1.4 percent in October.
In what has been a brutal year for global markets, the dollar has surged almost 9 percent as the Fed has aggressively hiked interest rates to tame inflation, luring investors back toward the country’s fixed income assets.
However, the dollar index has dropped nearly 8 percent since hitting a 20-year high in September, with a sharp slowdown in US inflation raising hopes that the Fed might soon end its tightening cycle.
The dollar index closed down 0.11 percent at 104.33.
Additional reporting by CNA, with staff reporter
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