USD continued to commerce below stress, as Fed fund futures shifted to completely value in a 25bp lower on the Sep FOMC. Treasury Secretary Scott Bessent stated on Bloomberg TV interview that ‘We may go right into a sequence of price cuts right here, beginning with a 50bp lower in September’. He went on to say that we should always in all probability be 150, 175bps decrease in the event you take a look at any mannequin. DXY was final at 97.84 ranges, OCBC’s FX analysts Frances Cheung and Christopher Wong word.
Markets favour promoting rallies
“It’s usually not widespread for Treasury secretaries to make particular feedback on price cuts. Individually in an earlier interview with Fox Enterprise, he stated that the “Fed may have been slicing in June, July” had it had the revised figures (referring to job market knowledge) in hand on the time. For the week remaining, PPI, preliminary jobless claims knowledge are due later whereas IP, retail gross sales, empire manufacturing, Uni of Michigan sentiment, inflation expectations knowledge are due tomorrow.”
“Information releases this week and upcoming Fedspeaks could form expectations on the trajectory of Fed lower. If US knowledge proceed to return in softer and that extra Fed officers begin to tilt dovish, then the chance of 50bp lower at Sep FOMC could rise. Whereas the subsequent FOMC is greater than a month away, subsequent week’s (over 21-23 August) Jackson Gap symposium is one key occasion to look at.”
“Traditionally, Jackson Gap has served as a platform for signalling shifts or reinforcing financial coverage instructions. This may increasingly supply Fed Chair Powell a chance to undertake a extra dovish tone, given the softening of US labour market and that inflation to date reveals restricted tariff-related value pressures. Each day momentum reveals indicators of turning gentle bearish whereas RSI fell. Bias for draw back play however favour promoting rallies. Assist at 97.20, 96.40 (2025 low). Resistance at 98.10/40 ranges (21, 50 DMAs), 99.30 (100 DMA).”
