Inflation in the US, as measured by the Personal Consumption Expenditures (PCE) Price Index, declined to 5% on a yearly basis in February from 5.3% in January, the US Bureau of Economic Analysis reported on Friday. This reading came in lower than the market expectation of 5.3%.

The annual Core PCE Price Index, the Federal Reserve's preferred gauge of inflation, edged lower to 4.6% from 4.7% in the same period, compared to analysts' forecast of 4.7%. On a monthly basis, Core PCE inflation and PCE inflation both rose 0.3%.

Further details of the publication revealed that Personal Income rose by 0.3% on a monthly basis in February and Personal Spending increased by 0.2%.

Market reaction

The US Dollar came under modest bearish pressure after these data and the US Dollar Index was last seen trading at 102.25, where it was still up 0.1% on a daily basis.