Dollar Dips As US Data Point To Subdued Infation

New York, June 29 | Updated: Jul 1 2004, 04:54am hrs
The dollar traded lower against the euro on Monday after a US report on personal income and consumption showed subdued inflation, confirming expectations that the Federal Reserve would take a measured approach in raising interest rates.

Higher interest rates tend to boost the appeal of dollar-denominated assets for global investors. US personal income rose 0.6 per cent in May, matching Aprils rise. Markets were expecting a 0.5 per cent increase. US personal consumption grew 1.0 per cent, compared with the previous months revised increase of 0.2 per cent. Last months spending level was the biggest advance, since Oct 2001s 2.4 per cent rise. The median forecast was for growth of 0.8 per cent. The core personal consumption expenditures index rose 0.2 per cent percent in May.