Inflation in the US, as measured by the Personal Consumption Expenditures (PCE) Price Index, declined to 4.2% on a yearly basis in March from 5.1% in February, the US Bureau of Economic Analysis reported on Friday. This reading came in lower than the market expectation of 4.6%.

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 4.5%. On a monthly basis, Core PCE inflation and PCE inflation rose 0.3% and 0.1%, respectively.

Further details of the report showed that Personal Spending remained unchanged in March while Personal Income increased by 0.3%.

Market reaction

The US Dollar continues to outperform its rivals after this data and the US Dollar Index was last seen rising 0.55% on the day at 102.05.