Foreign Exchange Market Update

July 26, 2024

United States (U.S.): Consumer Sentiment Index Dips Slightly Less Than Previously Estimated in July; PCE Price Index Inches Higher in June, Annual Growth Slows To 2.5%

The University of Michigan released data showing that consumer sentiment in the U.S. deteriorated slightly less than previously estimated in July. Consumer sentiment index for July was upwardly revised to 66.4 from the preliminary reading of 66.0. Economists expected the reading to be unrevised. Despite the upward revision, the consumer sentiment index for July is still down from 68.2 in June and marks the lowest reading since November 2023. 07/26/2024 - 10:24:00 (RTTNews)

Consumer prices in the U.S. increased in line with economist estimates in June, according to a highly anticipated report released by the Commerce Department. The Commerce Department said its personal consumption expenditures (PCE) price index increased by 0.1% in June after coming in unchanged in May. The uptick in the index matched expectations and the annual rate of growth by the PCE price index slowed to 2.5% in June from 2.6% in May. The slowdown in year-over-year growth also met estimates. However, the Commerce Department said the core PCE price index, which excludes food and energy prices, rose by 0.2% in June after increasing by 0.1% in May. Economists expected another 0.1% uptick. The annual rate of growth by the core PCE price index was unchanged from the previous month at 2.6% in June, while economists expected the pace of growth to slow to 2.5%. The readings on inflation, which are said to be preferred by the Federal Reserve, were included in the Commerce Department's report on personal income and spending. The report showed personal income rose by less than expected, while personal spending increased in line with economist estimates. 07/26/2024 - 08:40:00 (RTTNews)

European Union (E.U.): Eurozone Inflation Expectations Remain Unchanged

Euro traded at 1.0858 against USD at 9:00 am PST.

Eurozone consumers' inflation expectations remained stable in July according to the latest consumer expectations survey published by the European Central Bank. Inflation expectations for the coming year were steady at 2.8% after falling in May to their lowest level since September 2021. Inflation expectations for the next three years also remained unchanged in July, at 2.3%. However, economic expectations became more negative. The median forecast for economic growth over the next 12 months dropped to -0.9% from -0.8% in May.

Meanwhile, expectations for the unemployment rate over the coming twelve months decreased to 10.6% from 10.7% in May, the lowest level since the start of the series. Furthermore, consumers expect prices of their homes to increase over the next twelve months in June. House prices were expected to rise 2.7% compared to 2.6% in May, while expectations for mortgage interest rates decreased to 4.8% from 4.9%. Earlier this month, the European Central Bank left its benchmark interest rates unchanged ahead of a possible rate reduction in September even though they worry about the sticky inflation. In June, the ECB cut interest rates for the first time since 2019, citing an improvement in the inflation outlook. 07/26/2024 - 06:08:00 (RTTNews)