Inflation in the US, as measured by the Personal Consumption Expenditures (PCE) Price Index, declined to 5% on a yearly basis in December from 5.5% in November, the US Bureau of Economic Analysis reported on Friday.

The annual Core PCE Price Index, the Federal Reserve's preferred gauge of inflation, declined to 4.4% from 4.7% in the same period, matching the market expectation. On a monthly basis, Core PCE inflation and PCE inflation rose 0.3% and 0.1%, respectively.

Further details of the publication revealed that Personal Income increased by 0.2% on a monthly basis in December but Personal Spending declined by 0.2%.

Market reaction

The US Dollar Index edged slightly lower with the initial reaction and was last seen posting small daily gains at 101.85.