Title: USD Rebounds as Market Prepares for Data Deluge – What to Expect This Week
As the US Dollar (USD) recovers from a 5% decline in July, market attention turns to a busy week ahead. With key economic data releases on the horizon, including ISM manufacturing data, JOLTS job opening data, ADP, jobless claims, and ISM services, all eyes are on the August jobs report on Friday.
According to ING’s FX strategist Chris Turner, the consensus is predicting job gains of 165,000 and a drop in the unemployment rate to 4.2%. This could result in market pricing for just a 25bp cut at the start of the Fed easing cycle on September 18. However, if payrolls come in lower at 125,000 and the unemployment rate ticks up to 4.4%, the USD may face renewed pressure as expectations for a 50bp Fed rate cut in September increase.
Additionally, as the US presidential election draws closer, the impact of opinion polls on FX markets is becoming more apparent. The recent dollar sell-off may have been influenced by the Democrats’ improved polling performance. With the first Harris-Trump TV debate scheduled for September 10, market volatility is expected to rise as political developments unfold.
In light of the Labor Day holiday, FX trading is expected to remain subdued today, with the DXY likely to face resistance around the 101.85/102.00 region. As investors brace for a data-heavy week, the outcome of key economic reports and political events will shape market sentiment and impact the future direction of the USD.
Analysis:
This content discusses the recent performance of the US Dollar and highlights key economic data releases and political events that could influence market dynamics. Investors should closely monitor the upcoming data releases and political developments to make informed decisions about their investments. The USD’s reaction to these events will provide valuable insights into the market’s sentiment and potential future trends.