US Dollar Index: Range-bound consolidation as PCE looms – BBH
Brown Brothers Harriman’s (BBH) Elias Haddad notes the US Dollar (USD) is firm, consolidating just above recent lows following the US Treasury buyback announcement.
The US Dollar Index (DXY) is currently consolidating within a range between 96.00 and 100.00, according to Brown Brothers Harriman’s (BBH) analyst Elias Haddad. This consolidation follows the recent U.S. Treasury's buyback announcement and is expected to persist for the next few months. Haddad anticipates that the widening US growth advantage will be tempered by potential dovish Federal Reserve (Fed) repricing and concerns over US fiscal credibility, which may limit the DXY's upward movement.
The upcoming July Personal Consumption Expenditures (PCE) price index, scheduled to be released at 12:30 GMT, is expected to show persistent inflation pressures. Headline PCE is anticipated to rise by 0.1% month-over-month, compared to a decline of 0.1% in June, resulting in a year-over-year increase of 3.6% against 3.7% in June.
Core PCE is projected to increase by 0.2% month-over-month, mirroring the 0.1% growth in June and staying at 3.3% year-over-year for the second consecutive month. Real personal spending is expected to remain unchanged at 0.0% month-over-month, contrasting with an increase of 0.4% in June.
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