(Recasts; adds analyst comment, U.S. data; updates prices)
Rise in U.S. core PCE index, year-on-year, slows
Orders for U.S. durables advance modestly
U.S. consumers' 1-year inflation outlook drops to 18-month low
Dollar/yen on track for weekly loss after BoJ policy tweak
Commodity currencies rise vs greenback
The dollar slid against most currencies in choppy, thin trading on Friday as data signaled that the U.S. economy is cooling a bit, reinforcing expectations of smaller interest rate increases from the Federal Reserve and improving investors' risk appetite.
The personal consumption expenditures (PCE) price index rose 0.1% last month after climbing 0.4% in October. In the 12 months through November, the PCE index increased 5.5% after advancing 6.1% in October.
Excluding the volatile food and energy components, the PCE index gained 0.2% after increasing 0.3% in October. The so-called core PCE price index rose 4.7% on a year-on-year basis in November after increasing 5.0% in October. The Fed tracks the PCE price indexes for its monetary policy.
Both the S&P 500 and the Dow were higher on the day, while commodity currencies such as the Australian, New Zealand and Canadian dollars, which are highly sensitive to risk sentiment, also gained against the greenback. Investors also sold safe-haven Treasuries, pushing yields higher.
"Stocks are feeling a little more comfortable today. There seems to be no panic," said Amo Sahota, executive director at FX consulting firm Klarity FX in San Francisco.
"The inflation data is moving in the right direction, although not fast enough and the growth in the U.S. economy has not been hindered significantly. It's growing still at a gradual pace and there's no choking of the economy just yet," he added.
The Fed is widely expected to raise interest rates by just 25 basis points at its next policy meeting, in January, after multiple big increases.
In afternoon trading, the euro EUR=EBS rose 0.2% against the dollar to $1.0616.
The Australian, New Zealand and Canadian currencies advanced against the U.S. dollar. The Aussie unit was up 0.4% at US$0.6710 AUD=D3 , the kiwi, or New Zealand dollar, gained 0.6% to US$0.6287 NZD=D3 . Against the Canadian dollar, the greenback fell 0.4% to C$1.3599 CAD=D3 .
The Canadian dollar also benefited from data showing that the
Canadian economy
grew by 0.1% in October versus September, with another 0.1% increase in GDP seen likely in November, Statistics Canada data showed.
Against the yen, however, the dollar rose 0.4% to 132.89 yen JPY=EBS . The Japanese currency, though, was on track for a weekly drop of 2.7% after the Bank of Japan (BOJ) tweaked a key bond market policy earlier this week.
A second report on Friday showed that new orders for U.S.-made capital goods rose moderately in November while shipments fell, pointing to a slowdown in business spending on equipment this quarter as higher borrowing costs cool demand for goods.
Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.2% last month, data showed. These so-called core capital goods orders increased 0.3% in October. However, shipments of core capital goods dipped 0.1% after increasing 1.4% in October.
Another piece of data showed
U.S. consumers
expect price pressures to moderate notably in the next year, with a benchmark survey on Friday showing their one-year inflation outlook dropping in December to the lowest level in 18 months. This is a key number that Fed Chair Jerome Powell mentioned in one of his press briefings.
In what has been a brutal year for global markets, the dollar has surged almost 9% as the Fed has aggressively hiked rates to tame inflation.
The dollar index, however, has dropped more than 8% since hitting a 20-year high in September, with a sharp slowdown in U.S. inflation raising hopes that the Fed may soon end its tightening cycle.
The index was last little changed at 104.35 =USD .
======================================================== Currency bid prices at 1:47PM (1847 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 104.3900 104.3700 +0.04% 9.123% +104.5300 +104.1100 Euro/Dollar EUR=EBS $1.0608 $1.0600 +0.09% -6.68% +$1.0633 +$1.0587 Dollar/Yen JPY=EBS 132.8950 132.3800 +0.40% +15.45% +133.1350 +132.1700 Euro/Yen EURJPY= 140.96 140.22 +0.53% +8.16% +141.2100 +140.0800 Dollar/Swiss CHF=EBS 0.9340 0.9312 +0.32% +2.41% +0.9342 +0.9288 Sterling/Dollar GBP=D3 $1.2027 $1.2037 -0.05% -11.04% +$1.2089 +$1.2020 Dollar/Canadian CAD=D3 1.3606 1.3647 -0.29% +7.63% +1.3658 +1.3563 Aussie/Dollar AUD=D3 $0.6705 $0.6669 +0.61% -7.70% +$0.6725 +$0.6662 Euro/Swiss EURCHF= 0.9909 0.9867 +0.43% -4.44% +0.9920 +0.9866 Euro/Sterling EURGBP= 0.8819 0.8797 +0.25% +4.99% +0.8821 +0.8784 NZ NZD=D3 $0.6281 $0.6248 +0.61% -8.16% +$0.6304 +$0.6235 Dollar/DollarDollar/Norway NOK=D3 9.8695 9.8775 -0.09% +12.03% +9.9150 +9.8335 Euro/Norway EURNOK= 10.4740 10.4550 +0.18% +4.61% +10.5130 +10.4325 Dollar/Sweden SEK= 10.5283 10.4683 +0.67% +16.75% +10.5364 +10.4276 Euro/Sweden EURSEK= 11.1691 11.0944 +0.67% +9.14% +11.1881 +11.0850 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates https://tmsnrt.rs/2RBWI5E^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
