US dollar stays strong after miss on US personal income

Personal income was soft in the PCE report

It’s all about wage inflation at the moment and the slight miss on US personal income in the PCE report is a disappointment. It rose 0.3% m/m compared to 0.4% expected.

The soft reading hasn’t derailed a good start to the week for the US dollar. It’s the top G10 FX performer today and has made solid gains against the field.

If anything, there was a small downtick in the dollar after the data but it was a negligible move overall.

Looking ahead, we will get data on the Chicago PMI and pending home sales at 1345 GMT and 1400 GMT, respectively. Those probably won’t be big market movers either. Instead, keep an eye on the options expiries and the London fix as we count down towards the end of the month.

One spot to watch is the New Zealand dollar. It rebounded on Friday after two weeks of heavy selling. But today it’s right back in the doldrums and threatening last week’s low. Here’s the hourly chart: