Mid-Day Report: Dollar Steady after PCE, Sterling at New Record Low against Euro

Dollar remains steady in a generally quiet market after the release of Feb Personal income and spending report. While personal income rose more than expected by 0.5%, spending growth slowed sharply to a 17 month low of 0.1%. Both the headline and core PCE deflator rose 0.1% mom. Headline PCE deflator slowed slightly from 3.5% yoy to 3.4% yoy while core PCE deflator was unchanged at 2.0%. Note that real spending, thus, was unchanged in Feb and is taken by some economists as another sign of a recession.

Sterling remains the main focus of today after a series of weaker than expected economic data. Gfk consumer confidence slumped to a 15 year low of -19 in Mar. Nationwide house price dropped more than expected by -0.6% mom in Mar, slowing the yoy rate sharply from 2.7% to 1.1%. Q6 GDP growth was revised lower rom 2.9% yoy to 2.8%. Though current account deficit was narrower than expected at -8.46b. Sterling weakens sharply across the board and hit new record low against Euro at 0.7929.