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- Dollar struggles on FOMC days – SocGen
Dollar struggles on FOMC days – SocGen
Economists at Société Générale discuss USD outlook ahead of US Consumer Price Index (CPI) data and FOMC.
Dollar down vs Euro last four FOMC meetings
The US Dollar Index faces a battle in the week ahead to avoid a relapse to the lows of May if 1/ US CPI does not surprise to the upside, and 2/ the Fed does not raise rates on Wednesday. A hawkish pause could limit losses however if the statement maintains optionality to raise rates again July.
The dot-plot and updated inflation and unemployment rate forecasts could be crucial to how broader asset markets and hence FX responds. A 25 bps increase in the fed funds target range to 5.25% 5.50% would be a small shock and would give 2y yields another boost and spark profit-taking in G10/USD.
The Dollar has generally struggled at the last four FOMC meetings, weakening against the Euro on four occasions and against Sterling and the Yen on three occasions.
See – US CPI Banks Preview: Headline inflation is moderating, but underlying persists
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