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

Haresh Menghani FXStreet

US PCE Price Index Overview

Friday's US economic docket highlights the release of the Personal Consumption Expenditure (PCE) Price Index, scheduled later during the early North American session at 13:30 GMT. The gauge is foreseen to rise by 0.3% in November, matching the previous month's reading. The yearly rate is anticipated to have decelerated to 5.3% from 6% in October. Meanwhile, the Core PCE Price Index - the Fed's preferred inflation measure - likely eased to a 4.7% YoY rate in November from the 5% previous.

Analysts at TD Securities (TDS) offer a brief preview of the report and write: “We are looking for core PCE prices to have advanced at a consensus-matching 0.2% m/m pace for a second consecutive month in November (also matching the core CPI data). The y/y rate likely fell to 4.6% from 5.0% in October, suggesting prices continue to moderate but remain sticky at elevated levels.”

How Could it Affect EUR/USD?

Ahead of the key release, a recovery in the global risk sentiment prompts some selling around the safe-haven US Dollar and assists the EUR/USD pair to regain some positive traction. A softer inflation data could lift bets for a less aggressive policy tightening by the Fed. This should further boost investors' appetite for riskier assets and exerts additional downward pressure on the greenback.

Conversely, stronger PCE data might fuel speculations that the Fed will stick to its ultra-hawkish policy stance and push the US Treasury bond yields. This will be enough to trigger a fresh bout of a short-covering move around the US Dollar and attract aggressive selling around the EUR/USD pair. Nevertheless, the data is likely to infuse some volatility and provide meaningful impetus.

Eren Sengezer, Editor at FXStreet, outlines important technical levels to trade the EUR/USD pair: “The pair faces strong support at around 1.0580, where the Fibonacci 23.6% retracement of the latest uptrend and the 100-period Simple Moving Average (SMA) on the four-hour chart align. Below that level, 1.0530 (Fibonacci 38.2% retracement) could be seen as the next support before 1.0500.”

“On the upside, the pair could target 1.0680 (end-point of uptrend) and 1.0700 (psychological level) could be tested once EUR/USD rises above 1.0620 (20-period SMA, 50-period SMA) and confirms it as support,” Eren adds further.

Key Notes

• Pre-Christmas US Data Preview: Core PCE and Durable Goods may extend US Dollar retreat

• EUR/USD Forecast: Euro could test upper limit of weekly range after US data

• EUR/USD sticks to gains above 1.0600, lacks bullish conviction ahead of US PCE data

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.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

AUD/USD sits near a one-month top, above 0.7000 amid fresh USD selling

AUD/USD holds above 0.7000 through the Asian session, trading near a one-month high touched earlier this Monday amid renewed US Dollar selling. US bond yields decline further amid a modest pullback in crude oil prices, capping the USD recovery from a three-week low. Moreover, bets for a November RBA rate hike support the Aussie, though upside seems capped ahead of the crucial two-day FOMC meeting, starting Tuesday.

USD/JPY struggles below 157.00 on weak USD; holds above one-month low ahead of Fed, BoJ meetings

USD/JPY attracts fresh sellers during the Asian session on Monday, stalling its recovery from the lowest level since September 18, touched Friday as a further decline in US bond yields weighs on the US Dollar. Meanwhile, the Japanese Yen benefits from a more hawkish BoJ, further weighing on the currency pair. The downside, however, seems limited as traders keenly await Fed and BoJ policy meetings later this week.

Gold consolidates near $4,000 as recovery remains fragile ahead of Fed decision

Gold (XAU/USD) consolidates modest gains on Monday after last week’s sharp decline pushed the metal to $3,975, its lowest level since August. A pullback in Oil prices offers support as traders react to diplomatic efforts to ease tensions in the Middle East.

Cardano's derivatives and on-chain data confirm bears in control

Cardano extends losses, trading below $0.202 after three consecutive weeks of more than 20% declines since early October. Selling pressure continues to build as weakening derivatives metrics, bearish on-chain signals and a deteriorating technical outlook point to further downside risks. Derivatives data shows a bearish bias for Cardano.

Flight to safety meets a high earnings bar as central bank week begins

Treasuries rallied again, equities are struggling, and central banks and earnings are on the horizon. Last week, US Treasuries rallied for a second consecutive week. This pushed 10s and 30s to 5% and 5.33%, respectively, flattening the curve even as Brent crude rallied about 7% to within striking distance of March peaks at US$119.50, and tech stocks posted a second straight week of losses.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.