09:22 AM EDT, 04/26/2024 (MT Newswires) -- The US dollar resumed its climb against many trade partner currencies in early North American trade on Friday after a brief stumble following data showing that the Federal Reserve's preferred measure of inflation in March met economist expectations.

Core PCE prices excluding food and energy rose by a steady and unchanged 0.3% in March, in line with various measures of consensus, keeping the annual rate of PCE inflation stable at 2.8% for the period.

"Core PCE prices rose by 0.3% m/m in March, in line with expectations. But as yesterday's GDP report implied, prior months were revised up slightly," said Ali Jaffery, an economist at CIBC Capital Markets.

Overall PCE prices including food and energy also rose by a steady and unchanged 0.3%, in line with expectations, though this increase lifted the annual measure to 2.7% from 2.5% previously. Consensus had favoured a 0.3% annual rate.

Risks around the March numbers were widely perceived to be to the upside ahead of Friday's release after the Bureau of Economic Analysis said Thursday that Core PCE prices had risen at an annualized pace of 3.7% in the opening quarter.

"The slightly bigger-than-expected 3.7% annualised gain in the core PCE deflator was principally because January's gain was revised up to 0.50% from 0.45%," said Paul Ashworth, chief North America economist at Capital Economics.

Most major US dollar exchange rates saw knee-jerk weakness following Friday's report but the sell-off was quick to dissipate with the greenback reverting to intraday gains over many currencies.

EUR/USD was trading 0.10% lower at 1.0716 at last look while GBP/USD was 0.05% lower at 1.2506. USD/CAD was 0.04% higher at 1.3661 and USD/JPY was 0.77% higher at 156.86.

Meanwhile, yields implied by Federal Funds rate futures were little changed with the December 2024 contract sitting at 5.32%.

"The combination of yesterday and today's news is overall disappointing for the Fed. The economy remains fairly robust, led by very strong consumer spending, and inflation is moving in the wrong direction," CIBC's Jaffery said.