U.S. Dollar Pushes to 13-Month Highs as Traders Await Core PCE Inflation
Dollar strength keeps pressure on major FX pairs
The U.S. dollar has climbed to 13-month highs as investors continue to price in further rate hikes, keeping the greenback firm against major peers. That backdrop has left EUR/USD weakness visible, USD/JPY setup close to recent highs, and gold under renewed pressure ahead of a major U.S. inflation release.
Reuters-referenced market action showed broad USD strength, with EUR/USD lower and USD/JPY slightly higher, while gold slipped modestly. The move reflects a short-term market trend that remains closely tied to Fed guidance and incoming U.S. data.
Core PCE is the main event for traders today
The most important scheduled catalyst is the U.S. Core Personal Consumption Expenditures Price Index at 12:30 GMT. Consensus for the monthly core reading is 0.3%, up from 0.2% previously, while the broader PCE and GDP-related releases are also due at the same time. Market participants are treating this inflation print as a key test of whether the dollar can extend its recent breakout, with awaiting inflation data now central to the trade.
Why the data matters for USD/JPY and EUR/USD
USD/JPY is trading close to the 162.00 area, with short-term views remaining constructive as long as support near 161.10 holds. A firm PCE print could reinforce hawkish Fed expectations and keep the pair bid. By contrast, EUR/USD is stabilising above 1.1300 in some analyst views, but the pair remains vulnerable if the dollar’s momentum continues after the release.
What the latest market tone suggests
The current sentiment in the dollar market is bullish. Traders appear comfortable buying USD on dips while they wait for confirmation from inflation data, and that dynamic has also kept gold under pressure below the $4,000 level. For retail traders using forex trading or automated trading workflows, this is a classic macro event where volatility can expand quickly around the data window. Broader dollar flows also echo the themes seen in DXY pressure and similar data-driven sessions.
EUR/USD and USD/JPY remain the cleanest expression of the move
USD/JPY stays near highs despite intervention talk
Japanese yen weakness remains a dominant theme, even as traders continue to watch for possible intervention risk. The yen has weakened across major pairs, and recent commentary from the BoJ has not been enough to offset the policy divergence with the Federal Reserve. That leaves USD/JPY as the clearest way to express a stronger-dollar view in the near term, similar to the dollar breakout setup that has been driving the pair.
EUR/USD is trying to stabilise, but the dollar still has the upper hand
EUR/USD has managed to hold above 1.1300 for now, helped by calmer risk sentiment and slightly better German data. Still, the pair is not out of the woods. A hotter-than-expected PCE release could easily revive USD demand and push the euro lower again.
Short-term risks to watch
If the U.S. data disappoints, the dollar could lose some momentum and trigger profit-taking. A risk-on move in broader markets may also weaken USD demand, while intervention speculation could spark a sharp reversal in yen crosses. However, until those risks materialize, the bias remains tilted toward USD strength.
Bottom line for traders
The most important development is still the same: the U.S. dollar is trading at 13-month highs because markets expect more Fed tightening, and today’s core PCE report may decide whether that trend extends. USD/JPY and EUR/USD are the two pairs most likely to capture the next move, while gold and other rate-sensitive assets remain secondary beneficiaries of any shift in dollar sentiment.
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