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DXY: PCE must exceed forecasts or Euro inflation must underwhelm for the uptrend to continue – SocGen

The US Dollar Index (DXY) is up 2.4% since January on repricing of Fed cuts from six to three. Economists at Société Générale analyze Greenback’s outlook.

Headline +0.3%, Core +0.4%

PCE inflation is the next signpost on Thursday. We forecast headline +0.3% (2.4% YoY) and Core +0.4% (2.8% YoY). The spotlight will be on Core services after the 0.8% MoM spike in equivalent CPI two weeks ago.

The repricing of Fed cuts from six to three since January has boosted the DXY by 2.4%  over the past eight weeks but doubts over sustained upswing have emerged following the failure to orbit 105.00 after CPI and PPI. PCE must exceed forecasts or Euro inflation must underwhelm for the trend to continue.

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FXStreet Insights Team

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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