US Greenback (USD) traded underneath strain in a single day post-CPI launch and on feedback from Treasury Secretary Scott Bessent. DXY was final at 97.72 ranges, OCBC’s FX analysts Frances Cheung and Christopher Wong notice.
Every day momentum reveals indicators of turning delicate bearish
“In an interview with Fox Enterprise, he mentioned that the ‘Fed might have been slicing in June, July’ had it had the revised figures (referring to job market knowledge) in hand on the time. He additionally mentioned that ‘The actual factor now to consider is ought to we get a 50 basis-point price lower in September’. Fed fund futures priced >95% chance of 25bp lower for September FOMC. On CPI, headline CPI was regular at 2.7% YoY whereas core CPI noticed a pick-up (3.1% YoY), pushed by providers.”
“USD value motion recommend that markets had been anxious about extra important value will increase (owing to tariffs) earlier than the CPI report, however knowledge launch means that worries had been misplaced – inflation didn’t speed up in a significant method. In the meantime, Fed’s different mandate – labour market confirmed indicators of softening. Latest knowledge developments and the dovish tilt seen in some FOMC members recommend {that a} September lower is kind of a completed deal whereas there could also be hypothesis for 50bp lower, depending on knowledge end result or Fedspeaks.”
“This week, we hear from Fed’s Barkin, Bostic and Goolsbee. On the info docket, Thursday has PPI and Friday has retail gross sales and inflation expectations. Information releases this week and Fedspeaks could form expectations on the trajectory of Fed lower. Every day momentum reveals tentative indicators of turning delicate bearish whereas RSI is flat for now. Bias for draw back play however favour promoting rallies as a substitute. Assist right here at 97.20. Resistance at 99.30 (100 DMA), 100.20 ranges.”
