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USD/JPY rebounds even as US PCE report lower than forecast

The important US November PCE (Personal Consumption Expenditure) report had just been released. Ahead of this, the markets were anticipating a slight drop in the annualised deflator rate, to around 2.8%, from 3% in October. The core deflator rate was forecast to fall to around 3.3% from 3.5%. Spending and income were expected to be fractionally higher though. The actual data has revealed deeper than forecast decline. The core rate gas fallen to 3.2% and the main rate has dropped to 2.6%, below the forecast rate of 2.8% Ahead of this report the USD/JPY had recovered an earlier dip to below 142, but not by any amount of consequence. It was trading around 142.15 just as the data broke across the screens, which looked like little more than a paring back of short dollar positions ahead of the release. So, anyway the dollar has fallen back initially on this data but rebounded since. Perhaps at levels below 142 such an outcome was priced in? I cannot say on that for sure, but in any event the dollar has rebounded to back above 142.30 following this release and that could be due to a better than expected US durable goods orders release, which beat the street by some margin. The USD/JPY is now trading at 142.40 
 

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