DXY: Still keeping to three-week range – DBS
12.09.2024, 09:59

DXY: Still keeping to three-week range – DBS

The Dollar Index (DXY) initially fell to 101.27 from 101.68 during the US Presidential debate, DBS Senior FX Strategist Philip Wee notes.

Waiting for Fed’s Summary of Economic Projections

“Vice President Kamala Harris beat former President Donald Trump and won the endorsement of Taylor Swift. However, a higher-than-expected US CPI core inflation, which rose by 0.3% MoM in August instead of staying unchanged at July’s pace of 0.2%, lifted the DXY Index from 101.40 to 101.80.”

“During this period, the greenback became a haven on a sell-off in US equities from the futures market pulling back their bets for a 50 bps cut at the FOMC meeting on September 18. Following a 1.6% drop to 5407, the S&P 500 staged a steady recovery and ended Wednesday 1% higher at 5554, keeping the DXY in the 101.65-101.75 range for the rest of the session. The US Treasury 2Y yield rose 4.7 bps to 3.64%, while the 10Y yield edged up by 1.1 bps to 3.65%.”

“Despite expectations for today’s PPI core inflation to rise 0.2% MoM in August from 0% in July, mirroring its CPI counterpart, they do not change our long-held expectations for the Fed to lower rates by 25 bps next week. The Fed will also release its Summary of Economic Projections, which will provide insights on how concerned it is about averting a further cooling in the labour market. DXY is still keeping to its three-week range of 100.5-101.9.”
 

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