After three sessions of gains, the US dollar is poised to break a winning streak following a series of economic data that indicated cooling inflation. These latest numbers have dampened the market’s appetite for the Fed to keep raising rates later this year.

The personal consumption expenditures (PCE) price index jumped 4.1% in the year ending in May, according to the Department of Commerce. This was the first time it’s been above 4.0% since April 2023, but it was to the expected level, according to economists. That didn’t deter consumers, as spending increased 0.7% for the month, well above estimates. If gas prices keep heading down, so will consumer worries and inflation expectations, economists say.

As a result, the dollar index lost 0.19 percent to 101.41, the biggest daily percentage decline in two weeks, and the euro gained 0.16 percent to $1.1375. The greenback’s recent rally has driven gold to a few times undershoot $4,000 an ounce and drag bitcoin under $60,000 since this dip.

The CME Group has been tracking that probability to 30%, from 34.2% a week ago, and down from last year’s 35%. September’s expectations for hikes also dropped to 62.1%. While the inflation numbers are encouraging, there is still a “glimmer of hope” in the services inflation numbers, Chicago Fed President Austan Goolsbee said, but underlying pressures are still stubbornly high and are trending in the wrong direction.

Global Currency Shifts and Revised Economic Data

Other numbers showed first-quarter US gross domestic product (GDP) was revised up to 2.1% (annualized). But first quarter consumer spending growth was lowered sharply from a 1.4% rate previously reported to just 0.5%.

Britain’s pound gained 0.25% to $1.3196 in Europe. It follows a series of losses for the UK Government since Prime Minister Keir Starmer resigned from his post on Monday.

The dollar was relatively unchanged against the Japanese yen, which was trading at 161.79, near a level that would mark its lowest point since 1986. Tensions are building up within the Bank of Japan, with a hawkish board member, Naoki Tamura, calling for regular interest rate increases. A draft of the Japanese government’s economic blueprint, on the other hand, puts greater emphasis on maintaining low borrowing costs to boost private demand, something that financial analysts say is delaying, not preventing, fiscal risks.