New Zealand dollar holds above US$0.63 

Key Movers

The US dollar Index (DXY), which measures the value of the USD against a basket of major currencies, stands soft after the release of the US Personal Consumption Expenditures (PCE) data from August. The headline PCE inflation, the Federal Reserve's (Fed) preferred inflation measure, came in softer than expected, while the core PCE inflation matched expectations. U.S. consumer spending increased slightly less than expected in August, but that did little to change expectations that solid economic growth persisted in the third quarter, while the annual rise in prices was the smallest in just over 3-1/2 years. The personal consumption expenditures price index, a gauge the Fed focuses on to measure the cost of goods and services in the U.S. economy, rose 0.1% for the month, putting the 12-month inflation rate at 2.2%, down from 2.5% in July and the lowest since February 2021. The Fed targets inflation at 2% annually. Strong growth expectations this quarter were underscored by other data from the Commerce Department on Friday showing the goods trade deficit narrowed by the most in nearly two years last month. That suggested trade would likely impose a modest drag on gross domestic product, which could be more than offset by a rise in inventories. September's employment report next week could offer more clues on the size of future reductions in borrowing costs. Stock market futures were positive following the report while Treasury yields were negative.