USD/JPY slips as US PCE data underwhelms

The US April PCE report has just been released. The data has not really detracted much from expectations. The core annualised PCE rate was expected to have remained unchanged at 2.8% and that is what has emerged. The monthly rate was slightly lower, at 0.2%, where 0.3% was forecast. Income was in line and so was spending pretty much. The dollar has reacted negatively to this data. The USD/JPY has fallen below 157 and the EUR/USD has lifted above 1.0860 on the headlines, but overall there were no major surprises. However, the immediate reaction across the markets have been somewhat dovish all the same. Perhaps it was due to the fact that prices did not rise further that has caused this