US dollar hotspots
The update of the US Consumer Price Index (CPI) is likely to have an impact US dollar During the interruption period of the Federal Reserve, when the central bank prepares for a temporary rise in inflation.
US dollar key forecast: neutral
The US dollar index (DXY) has emptied the September opening range as it quickly withdrew due to a weaker-than-expected decline Non – Agricultural Payroll Statement (NFP) Report, but Greenback can expect a headwind Federal Open Market Committee (FOMC) interest rate decision on September 22, as inflation is expected to slow for the first time this year.
The headline index of the US consumer price index is expected to fall to 5.3% after remaining at 5.4% for two consecutive months, while the core inflation temperature is expected to decline for the second month in a row in August. Evidence of slower price growth could lead to a decline in the US dollar, as the Federal Open Market Committee (FOMC) acknowledges that “the economy had not yet reached the Committee’s broad and inclusive goal of maximum employment, ”And the central bank can maintain the path of current monetary policy The chairman Jerome Powellrequires that “we have a lot of land to cover for maximum employment.“
However, signs of sticky inflation in the US dollar may provoke an upward reaction, as it puts pressure on the FOMC to normalize monetary policy sooner rather than later, and it remains to be seen whether Federation officials makes significant changes Summary of Economic Forecasts (SEP) like “Some participants noted that there are upside risks to inflation, linked to concerns that supply disruptions and labor shortages may last longer than expected.”
With this in mind, recent developments in the US economy are likely to affect Greenback before the next Fed interest rate decision, as the central bank begins to cut media coverage, but cutting the monthly opening interval , 82) previously turned course.
– Written by David Song, Currency Strategist
Follow me on Twitter at @DavidJSong