Although the US economy fell into “technical recession” the previous day, inflation expectations data, as per the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED), refreshed the monthly high by the end of Thursday’s North American session.

That said, the inflation gauge recently jumped to the 2.48% mark during the three-day uptrend while refreshing the monthly peak.

It should be noted that the Flash readings of the US Q2 GDP printed -0.9% Annualized figure versus 0.5% expected and -1.6% prior. With the second consecutive negative GDP print, the US fall into a “technical recession”, which in turn probes the Fed hawks and exerts downside pressure on the US dollar.

However, the recent jump in the US inflation expectations ahead of the Fed’s preferred inflation gauge, namely the Core Personal Consumption Expenditure (PCE) Price Index, for July, could underpin the US dollar’s rebound from a 1.5-month low.

Also read: Forex Today: Technical recession is not a recession?