Deutsche Bank analyzed that expectations for a Fed rate hike receded as the US Personal Consumption Expenditures (PCE) price index, released on the 25th (local time), rose 0.4% month-over-month, falling below economists' forecast of 0.5%. Deutsche Bank analysts stated in a report that this data "has the effect of curbing the Fed rate hike narrative that has gained traction in recent weeks." They added that while Fed officials remain cautious on the inflation outlook, the view is spreading that the Fed may not need to raise rates this year. Consequently, the dollar weakened slightly as the market lowered its expectations for a Fed rate hike.
