Forex Today: US data fueled market concerns ahead of PCE inflation figures

What you need to take care of on Friday, February 24:

Risk aversion continued underpinning the American Dollar on Thursday, reaching fresh February highs against most major rivals. The Greenback advanced during Asian trading hours on the back of hawkish FOMC Meeting Minutes, picking up momentum during the US session and after mixed United States figures.

On the one hand, the annualized pace of growth in the country was downwardly revised to 2.7% from 2.9% in the last quarter of 2022, according to the second estimate of the Q4 GDP estimate. On the other, inflationary pressures in the same period were higher than previously estimated, as Personal Consumption Expenditure Prices rose by 3.7% QoQ, while the core reading came in at 4.3%  higher than the 3.9% gain from the third quarter of 2022. The figures further fueled speculation the US Federal Reserve will continue to hike rates in the upcoming meetings while a potential pivot on monetary policy is farther away.

Wall Street edged lower with the news, with major indexes reaching fresh February lows. US indexes trimmed part of their losses ahead of the close, preventing the US Dollar from advancing further.

EUR/USD fell to 1.0576 and remained below 1.0600 by the US close. GBP/USD trades at around 1.2020, while the USD/JPY settled at around 134.50. Commodity-linked currencies recovered some ground against their American rival ahead of the close, with AUD/USD hovering around 0.6800 and USD/CAD trading at 1.3540.

Market players are now waiting for  the US January Personal Consumption Expenditures Price Index, the Federal Reserve’s favorite inflation gauge. The PCE Price Index is expected to have risen by 4.9% YoY in January, easing from the previous 5%, while the more relevant core PCE Price Index is foreseen at 4.3%, after printing 4.4% in December.  

Gold maintain its bearish tone and trades at around $1,823 a troy ounce. Crude oil prices, on the other hand, recovered some ground and WTI hovers around $75.30 a barrel.