The Dollar Index (DXY) has been consolidating in a range of 101.55-101.80 after a recent three-day rally that saw it climb from 100.55 to 101.80, according to DBS Senior FX Strategist Philip Wee.
Markets Set to Experience Increased Volatility
Despite US stock and bond markets being closed on Monday for the Labor Day holiday, S&P and Nasdaq Composite futures are indicating a positive open today following a period of negativity on Monday. The consensus is that the US ISM Manufacturing PMI will show improvement to 47.5 in August from 46.8 in July.
However, Friday’s jobs report is seen as crucial in supporting the expected 25 bps rate cut at the upcoming FOMC meeting on September 18. With markets also factoring in rate cuts from other central banks, we can expect increased volatility after two months of USD selling.
Analysis:
The Dollar Index has been showing signs of consolidation after a recent rally, which could indicate a period of stability or potential for further movements. The upcoming FOMC meeting and other central banks’ rate decisions are likely to impact market fluctuations, making it crucial for investors to stay informed and prepared for potential changes in the financial markets. This could have implications for various investment decisions and financial strategies, highlighting the importance of staying updated on market developments.