US dollar: forecast for August 24 - 30
US Dollar index reached its lowest level since June 30 by the end of the week (95.40). Increased global uncertainty lowers expectations for a Fed’s rate hike on the September 17 meeting. Dovish Fed’s policy minutes and lower inflation data became another argument against a premature hike. Futures market is currently pricing in only 24% chance for a Fed’s hike in September.
Chart. USD Index Weekly
We believe the US currency has some room for a corrective decline, but the buyers are expected to return into the market ahead of the September 4 NFP. It will finally become clear that there is nothing more stable than the US economy these days.
US are scheduled to release a bag of important figures on the new week. Pay special attention to the Q2 GDP second estimate. There is a chance for the figure to be revised higher from the preliminary +2.3% reading. The famous Jackson Hole symposium starts on Thursday.