When is the US August PCE Price Index and how could it affect EUR/USD?


US PCE Price Index Overview

Friday's US economic docket highlights the release of the Personal Consumption Expenditure (PCE) Price Index for August, scheduled later during the early North American session at 12:30 GMT. The gauge is foreseen to rise by 0.3% during the reported month against the 0.1% fall recorded in July. The yearly rate is anticipated to have accelerated to 6.6% in August from 6.3% previous. Meanwhile, the Core PCE Price Index - the Fed's preferred inflation measure - likely edged up to a 4.7% YoY rate in August from the 4.6% in the previous month.

Analysts at Commerzbank offer a brief preview of the report and explain: “Excluding food and energy, the deflator probably increased by 0.4% MoM. This is a bit less than the recently released core CPI rate. This is because rents have a lower weight in the deflator than in the CPI basket (15% vs. 32.6%); rents rose quite strongly in the CPI in August. In addition, medical services have a much higher weighting in the deflator, and here the government health services included in the deflator, in contrast to the CPI, have a dampening effect on prices.”

How Could it Affect EUR/USD?

The markets started pricing in the possibility of another supersized 75 bps Fed rate hike move in November following the release of hotter-than-expected August US consumer inflation figures. A stronger-than-expected PCE report will reaffirm expectations and boost the US dollar. Conversely, a softer print could force the USD to prolong this week's sharp retracement slide from a two-decade high amid a further descent in the US Treasury bond yields. The immediate market reaction, however, is more likely to be short-lived, warranting some caution before placing aggressive directional bets around the EUR/USD pair.

Eren Sengezer, Editor at FXStreet, offers a brief technical overview and outlines important technical levels to trade the EUR/USD pair: “The Relative Strength Index (RSI) indicator on the four-hour chart holds above 50 and the pair continues to trade above the 50-period SMA, confirming the bullish bias. On the upside, 0.9850 (Fibonacci 61.8% retracement of the latest downtrend) aligns as initial resistance. With a four-hour close above that level, the pair could target 0.9900 (psychological level, 100-period SMA) and 0.9950 (200-period SMA).”

“Supports are located at 0.9800 (Fibonacci 50% retracement), 0.9750 (Fibonacci 38.2% retracement, 50-period SMA) and 0.9700 (psychological level, 20-period SMA),” Eren adds further.

Key Notes

  •   US August PCE Inflation Preview: Will it trigger a dollar correction?

  •   Core PCE Preview: Forecasts from six major banks, strong price pressures

  •   EUR/USD Forecast: Quarter-end flows could boost the euro

About the US PCE Price Index

The Personal Spending released by the Bureau of Economic Analysis, Department of Commerce is an indicator that measures the total expenditure by individuals. The level of spending can be used as an indicator of consumer optimism. It is also considered as a measure of economic growth: While Personal spending stimulates inflationary pressures, it could lead to raise interest rates. A high reading is positive (or Bullish) for the USD.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD struggles to recover above 1.1000 ahead of Fedspeak

EUR/USD struggles to recover above 1.1000 ahead of Fedspeak

EUR/USD holds ground on upbeat German Industrial Production data on Tuesday but finds it difficult to clear the 1.1000 hurdle. In the absence of high-tier macroeconomic data releases from the US, investors will pay close attention to comments from central bankers.

EUR/USD News
GBP/USD holds steady near 1.3100 as mood sours

GBP/USD holds steady near 1.3100 as mood sours

GBP/USD trades in a tight channel at around 1.3100 following Monday's decline. The negative shift seen in risk mood doesn't allow the pair to gather recovery momentum as investors await comments from Federal Reserve policymakers.

GBP/USD News
Gold recovers from weekly lows, trades near $2,650

Gold recovers from weekly lows, trades near $2,650

After falling to a fresh weekly low below $2,630 earlier in the day, Gold gains traction and recovers to the $2,650 area. The precious metal benefits from the negative shift seen in risk mood as geopolitical tensions remain high. 

Gold News
Ripple price shows signs of weakness

Ripple price shows signs of weakness

Ripple price stabilizes around $0.530 and trades within a tight range for the fourth day in a row on Tuesday. After breaking below its ascending trendline last week, XRP’s price was rejected from its daily resistance level on Monday.  

Read more
RBA widely expected to keep key interest rate unchanged amid persisting price pressures

RBA widely expected to keep key interest rate unchanged amid persisting price pressures

The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.

Read more
Five best Forex brokers in 2024

Five best Forex brokers in 2024

VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals. 

Read More

Forex MAJORS

Cryptocurrencies

Signatures