The dollar index declined Friday following gains over two consecutive days, after economic data showed a slowdown in consumer spending, raising some doubts about the Fed’s prospects for further rate increases.
The U.S. Department of Commerce said Friday that consumer spending rose 0.1 percent last month. April’s data were adjusted to 0.6 per cent instead of the previous 0.8 per cent to show accelerated spending.
The personal consumption expenditure price index rose 0.1 per cent in May after rising 0.4 per cent in April. In the 12 months to May, the personal consumption expenditure price index rose 3.8 per cent after a 4.3 per cent jump in April.
The Federal Reserve tracks personal consumption expenditure price indices in order to meet its inflation target of 2 per cent.
The dollar index fell 0.377 per cent to 102.920.
The index had risen 0.82 per cent during the previous two sessions after Fed Chairman Jerome Powell’s remarks and strong economic data boosted market expectations that the U.S. central will raise interest rates again this year, while easing the belief that a rate cut could be available by year’s end.