Solid Core Inflation Data Buoys U.S. Dollar

(RTTNews) - The U.S. dollar firmed against its major counterparts in the European session on Friday, as the Federal Reserve's preferred measure of core inflation accelerated in the month of June, sparking hopes that the central bank will continue its tightening cycle in the months ahead.

Data from the Commerce Department showed that the annual rate of core consumer price growth accelerated to 4.8 percent in June from 4.7 percent in May. Economists had expected the core PCE price index to match the previous month's rate.

Personal income climbed by 0.6 percent in June following an upwardly revised 0.6 percent advance in May.

Economists had expected personal income to rise by 0.5 percent, matching the increase originally reported for the previous month.

The report also showed personal spending jumped by 1.1 percent in June after rising by an upwardly revised 0.3 percent in May.

Personal spending was expected to advance by 0.9 percent compared to the 0.2 percent uptick originally reported for the previous month.

Atlanta Fed President Raphael Bostic said that the U.S. is not in a recession and more rate hikes would be required to control inflation.

"I'm convinced we are going to have to do more in terms of interest-rate moves. But exactly how much and in what trajectory will depend on how the economy evolves over the next several weeks and months," Bostic said.

The currency fell in the previous session on expectations that the Fed could slow the pace and size of future rate hikes if the economy cools.

The greenback rebounded to 134.59 against the yen, from a 6-week low of 132.50 seen at 2:55 am ET. The pair was worth 134.25 when it ended deals on Thursday. If the greenback rises further, it may likely seek resistance around the 136.00 level.

The greenback edged up to 0.9594 against the franc, up from more than a 4-week low of 0.9502 set at 3 am ET. At Thursday's close, the pair was valued at 0.9540. Further rally in the currency may challenge resistance around the 0.97 region.

After falling to a 4-day low of 1.0254 at 2:30 am ET, the greenback moved up to 1.0146 against the euro. The pair had closed Thursday's deals at 1.0197. Continuation of the greenback's uptrend may lead it to a resistance around the 1.00 region.

The greenback touched a 2-day high of 1.2063 against the pound, following more than a 4-week low of 1.2245 hit at 3 am ET. The pound-greenback pair had finished yesterday's trading session at 1.2177. Should the currency rallies again, 1.19 is possibly seen as its next resistance level.

The greenback rose to 1.2855 against the loonie, from a 1-1/2-month low of 1.2789 it logged at 2:15 am ET. The greenback was trading at 1.2806 per loonie at yesterday's close. The greenback is likely to locate resistance around the 1.30 region.

The greenback firmed to a 2-day high of 0.6218 against the kiwi and a 4-day high of 0.6911 against the aussie, rising from more than a 5-week low of 0.6329 and a 6-week low of 0.7032, respectively seen in the previous session. The greenback had ended yesterday's trading at 0.6285 against the kiwi and 0.6990 against the aussie. Next key resistance for the greenback is seen around 0.60 against the kiwi and 0.67 against the aussie.