Forex Today: US Dollar Weakens Further Ahead of Key PCE Inflation Data

Forex Today: US Dollar Weakens Further Ahead of Key PCE Inflation Data

The US Dollar (USD) remains under pressure as Friday, June 27, begins, with the US Dollar Index (DXY) continuing to slide below 97.50, extending its fourth consecutive daily decline. Market participants remain cautious ahead of a major economic event — the release of the Personal Consumption Expenditures (PCE) Price Index for May, scheduled for later today.

USD Weakness Continues

The US Dollar’s ongoing selloff comes amid:

• Dovish expectations for future Federal Reserve (Fed) policy
• Heightened market sensitivity to inflation data
• Uncertainty surrounding Fed independence, which has weighed on USD sentiment

The PCE report is the Fed’s preferred inflation metric, and any surprise in the data could significantly alter short-term USD direction.

What to Watch: US PCE Inflation Report

The US Bureau of Economic Analysis (BEA) will publish the PCE Price Index this afternoon. This release holds substantial weight as:

• It informs the Fed’s view on price stability
• It shapes rate cut expectations for the remainder of 2025
• It influences broader risk sentiment across the financial markets

A weaker-than-expected print could add fuel to USD losses and increase rate cut bets, while hotter inflation may slow the bearish trend.

Technical Snapshot: DXY

• Current Level: Below 97.50
• Support: 97.00 (2022 low)
• Resistance: 97.90, 98.20
• Trend: Bearish, unless PCE surprises to the upside

Also Read: Will PCE Inflation Push the Fed to Act? Market Scenarios Explained