The US dollar strengthened after core Personal Consumption Expenditures (PCE) inflation exceeded expectations, prompting markets to anticipate a more restrictive Federal Reserve stance. Core PCE rose 0.4% month over month against a 0.3% forecast, while annual inflation held at 2.8%, above the 2.7% estimate. GBP/USD fell to approximately 1.2700 from around 1.2750, the US Dollar Index rose 0.3%, and futures markets reduced the implied probability of a Federal Reserve rate cut by June to roughly 60% from nearly 70% before the data. Bloomberg Markets reported that the dollar recovered about half of its recent losses. In prediction markets, the stronger dollar and higher inflation expectations have lowered the perceived probability that gold (XAUUSD) will reach $4,700 in August, consistent with the usual inverse relationship between dollar strength and gold prices. Federal Reserve communications, upcoming inflation and employment data, geopolitical developments and central-bank gold purchases could alter the outlook.