Dollar Set to Snap 6-Month Losing Streak; GBP/USD slumps on Weak UK GDP Data
The dollar was roughly unchanged against a basket of major currencies as data showed the trend of slowing inflation continued in August but losses in the greenback were capped by a slump in the pound after UK second-quarter economic growth undershot expectations.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.08% to 93.01.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity,edged up 0.1% last month. The commerce department said Friday.
Inflation, however remained subdued, as the core personal consumption expenditures price index slowed to 1.3% in August from 1.4% in July. The core PCE is the Federal Reserve's preferred inflation measure and has a 2 percent target.
The week inflation data weighed on the dollar, which remained on track to post a third-straight quarterly loss despite rising expectations that the Federal Reserve will hike rate later this year.
The reports come amid speculation surrounding the future of Janet Yellen’s position as Federal Reserve chair after both President Donald Trump and U.S. Treasury Secretary Steven Mnuchin reportedly met with Kevin Warsh to discuss the possibility of his nomination to replace Janet Yellen.
Warsh was a Fed governor from 2006 until 2011 and was a member of former Fed chairman Ben Bernanke's inner circle of advisers.
Weakness in the greenback, however, was capped by a slump in the pound amid weaker-than-expected UK economic growth data.
GBP/USD fell 0.36% to $1.3394.