Will the Dollar's Strength Following the U.S. PCE Report Continue on the Back of Employment Data?
27.08.2026
- Minutes of the ECB Governing Council Meeting
- U.S. Initial Unemployment Claims for the Previous Week
In the U.S. currency market the previous day, the U.S. dollar rose following the higher-than-expected July PCE deflator. The PCE deflator came in at 3.7% year-over-year, exceeding market expectations of 3.6%, and also rose 0.2% month-over-month, surpassing market expectations of 0.1%.The Dollar Index rose 0.24% to 99.145, while the USD/JPY pair traded within a range of about 0.57 yen, between 158.88 and 159.45 yen, before closing near 159.31 yen.The level around 159.50 yen is likely to act as resistance, while the level around 159.00 yen is likely to act as support.
Although expectations of an additional ECB rate hike weighed on European currencies, the euro fell against the U.S. dollar. ECB Executive Board Member Schnabel stated that, at current policy rates, it would be difficult for inflation to return to the medium-term target, and that further monetary tightening is necessary.However, euro buying did not persist, and the euro/dollar pair traded within a range of about 35 pips, between $1.1642 and $1.1677, closing near $1.1653.We will monitor whether the $1.1680 level acts as resistance and the $1.1640 level acts as support.
Today’s economic indicators include the release of Germany’s September GfK Consumer Confidence Index at 3:00 p.m., with a slight improvement expected from the previous reading of -29.6 to -29.5. At 8:30 p.m., the ECB will publish the minutes of its July 22–23 Governing Council meeting.At 9:30 p.m., the U.S. will release the previous week’s initial jobless claims and continuing claims, as well as July wholesale inventories (flash estimate).Initial jobless claims are expected to rise to 208,000 from the previous reading of 206,000. We will be watching closely to see how the ECB’s internal assessment of inflation and the U.S. employment data influence the direction of the euro and the U.S. dollar.
Author: Keisuke Sakurai
