US Dollar: Fed repricing risk weighs on usd – BBH

Brown Brothers Harriman's Elias Haddad observes the US Dollar (USD) consolidating recent gains, with the US Dollar Index (DXY) testing its 200-day moving average resistance and US data showing inflation consistently above the Federal Reserve's 2% target while real spending remains stagnant. Despite Fed funds futures pricing limited tightening, Haddad believes this provides the Fed with flexibility to maintain a dovish stance.

USD faces vulnerability to a potential shift in policy expectations. US Personal Consumption Expenditures (PCE) rose slightly in July, in line with forecasts, but real spending remained sluggish. The Fed is likely to hold steady, leaving the USD vulnerable to a dovish reassessment. Jackson Hole Economic Symposium commences with Fed Chair Kevin Warsh's speech, but little in the way of concrete policy signals due to Warsh's hesitance to offer forward guidance and the absence of a Q&A session.

The editorial team consists of journalists who carefully select observations from esteemed experts, incorporating insights from commercial and internal analysts. Despite a brief dip to six-day lows, GBP/USD shows signs of rebounding, trading near the 1.3600 barrier. EUR/USD recovers from recent losses, settling in the mid-1.1600 range.

Gold experiences a further decline, reaching new weekly lows near $4,570 per ounce. Cryptocurrencies, led by Bitcoin and Ethereum, exhibit a general uptrend. Meanwhile, the US diesel crack spread hits a record high, signaling a shift in the oil markets.