BREAKING: USD weakens after US data pack

US data pack for October was released at 1:30 pm GMT today. Attention was mostly on PCE inflation data and it showed slight deceleration. Core PCE fell from 5.1% to 5.0% YoY, in line with market estimates, while headline gauge dropped to 6.0% YoY (exp. 6.2% YoY), which is the lowest reading this year. Personal income and spending data came in above expectations. Spending figures continue to point to solid consumer spending, helped by a tight labour market and high savings, despite rising prices and borrowing costs. Within goods, the leading contributors were new motor vehicles, namely light trucks and gasoline. Within services, the largest contributor to the increase was spending for food services and accommodations, which was partly offset by a decrease in financial services and insurance, namely financial service charges, fees, and commissions. 

Personal income reached its highest reading since October of 2021, primarily reflecting increases in compensation and government social benefits. The increase in compensation was led by private wages and salaries. Within private wages and salaries, both services-producing industries and goods-producing industries increased. The increase in government social benefits reflected increases in "other" benefits, primarily reflecting one-time refundable tax credits issued by states.

Data pack for October:

• Headline PCE inflation: 6.0% YoY vs 6.2% YoY expected (6.2% YoY previously)

• Core PCE inflation: 5.0% YoY vs 5.0% YoY expected (5.1% YoY previously)

• Personal spending: 0.8% MoM vs 0.6% MoM expected (0.6% MoM previously)

• Personal income: 0.7% MoM vs 0.4% MoM expected (0.4% MoM previously)

• Jobless claims: 225k vs 235k expected (240k previously), however continuing claims jumped to 1608k

EURUSD is trading higher today and today’s data provided more fuel for bullss. The main currency pair is currently approaching a resistance zone in the 1.0500 area. Source: xStation5