US Dollar below 106.00 after PCE data

The US dollar is preparing for French elections risk over the weekend, with early recovery thanks to recent statements by Trump and Suzuki. The PCE data is in line with expectations, with the index hovering around 106.00, back to Wednesday’s levels. Traders are still digesting the Trump-Biden debate, where many saw former US President Donald Trump as the victor.

French voters will go to the polls on Sunday, with the Far Right leading by 36.2%, followed by the Far Left with 28.3%, and President Emmanuel Macron’s party lagging by 20.4%.

On the US economic calendar, Personal Consumption Expenditures (PCE) came in line with expectations, with the disinflationary trajectory in tact. Traders will now be on the lookout for the University of Michigan, ahead of the first round in the French elections. The Far Right movement is currently in the lead, followed by the Far Left and the party from current rulling President Emmanuel Macron.

The Chicago Purchase Managers Index (PMI) was an upbeat surprise, but remains in contraction. The University of Michigan will release its final reading for June, with consumer sentiment jumping to 68.2, and inflation expectations easing to 3%.

Equities are trying to close this week off on a high note, with several green closures in Asia and European and US equities in the green. The CME Fedwatch Tool is broadly backing a rate cut in September, with odds at 57.9% for a 25-basis-point cut, 35.9% chance for a rate pause, and a slim 6.2% possibility for a 50-basis-point cut.