US Dollar Index holds near a 13-month high of 101.80 as markets anticipate later Federal Reserve rate hikes.
The CME FedWatch tool shows markets pricing in an 83% chance of rate hikes by late December.
US May headline PCE is expected to rise to 4.1%, while core PCE should edge up to 3.4%.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, continues its winning streak for the fourth successive day and is trading around 101.60 during the European hours on Thursday.
The dollar index remains close to 13-month high of 101.80, reached on Wednesday, amid rising market expectations of Federal Reserve (Fed) interest rate hikes later this year. Traders are positioning for tighter monetary policy after Federal Reserve Chairman Kevin Warsh signaled a firm focus on taming inflation, noting that the broader economy remains on a stable footing. Reflecting this hawkish shift, the CME FedWatch tool shows that markets are now pricing in nearly 83% probability of rate hikes by the end of December.
Traders focus now shifts to the upcoming US Personal Consumption Expenditures (PCE) data release, where headline inflation is expected to heat up to 4.1% YoY in May from April's 3.8%, and core PCE is projected to edge higher to 3.4% YoY.
US 10-year Treasury yield holds steady near 4.1% on Thursday, maintaining their lowest levels in over six weeks. Yields had tumbled roughly 10 basis points the previous day as breakthrough progress in US-Iran peace talks pulled oil prices back down to pre-conflict levels, significantly easing inflation fears.
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