DXY Remains Weak
The US Dollar is on watch today as traders prepare to receive the latest US PPI data due this afternoon. On the back of Friday’s big jobs report which saw the US NFP plunging lower once again, traders are now looking ahead to the upcoming September FOMC meeting next week where the Fed is expected to cut rates and signal further easing to follow ahead of year end.
US Inflation Data Due
Inflation data this week (PPI today and CPI tomorrow) will be the last key inputs to assess ahead of that meeting. As such, any fresh weakness in price data should help cement dovish Fed expectations, leading USD sharply lower into the meeting. However, any upside surprises will see more uncertainty retained into the meeting. While a cut this month looks set in any case, the prospect of further 2025 easing will be called into question if inflation is seen rising again.
Today’s PPI Forecasts
On the numbers front today, the market is looking for core PPI to have cooled to 0.3% from 0.9%, the same with headline PPI. If the forecasted drop is confirmed, this should keep USD pressured lower into tomorrow’s headline CPI release which will prove the most important reading for traders. However, any upside surprise today could see USD lifting as traders cover shorts, particularly given that CPI is expected to rise again tomorrow.
Technical Views
DXY
For now, the index remains below the 98-level following the downside channel break. With momentum studies weak, focus is on a further drift lower while below the channel with 96.89 the ley support to watch. Longer-run, 94.85 will be the deeper bear-target if we see a proper break lower. Topside, 99.15 is the key resistance which opens the path back to 100 if broken.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.