US dollar slides after PCE report, megacap tech stocks struggle

The US dollar fell broadly on Friday after the personal consumption expenditures price index came in line with expectations, while megacap technology stocks reversed early gains to end the session lower.

The PCE report, the Federal Reserve's preferred inflation gauge, showed no upside surprise, reinforcing the view that price pressures are peaking. With oil prices also declining, the market interpreted the data as supportive for a less aggressive Fed, prompting dollar selling across the board. The dollar index slipped to session lows as traders trimmed long dollar positions.

For currency traders, the dollar's slide reflects a shift in interest rate differential expectations. If inflation has indeed peaked, the Fed may have less need to hike further, narrowing the rate advantage the dollar has enjoyed over other major currencies. This dynamic is particularly relevant for pairs like EUR/USD and GBP/USD, which rallied on the dollar weakness. Traders can monitor real-time pricing on NowPrice's FX page to track the evolving moves.

Looking ahead, the focus will turn to next week's ISM manufacturing data and the June jobs report, which will provide further clues on the economy's trajectory. Any signs of softening could accelerate the dollar's decline, while a strong print might reignite hawkish bets. The tech selloff also bears watching, as a sustained rotation out of megacap names could signal broader risk aversion, potentially benefiting safe-haven currencies like the yen and Swiss franc.