Dollar: rebound needs stronger data – TD Cowen
TD Cowen’s Washington Strategy team, led by Chris Krueger, notes that a durable rebound in the Dollar hinges on stronger US policy follow-through and renewed upside surprises in US data.
TD Cowen's Washington Strategy team, headed by Chris Krueger, believes a robust recovery in the US Dollar depends on stronger US policy implementation and encouraging data releases. Currently, analysts maintain a predominantly bearish stance on the Dollar, noting limited upside compared to the Canadian Dollar and Chinese Yuan, as they anticipate crucial US employment and inflation data.
The analysts anticipate a significant rebound in US payrolls in August following a disappointing July performance, with the European Central Bank's Consumer Price Index release also under market scrutiny. While US interest rates digest updates to the Treasury's buyback program, the yield curve remains flatter and term premium has decreased.
Market attention will shift to the US payrolls announcement next week, with a more robust report expected to trigger a sharper reaction than a lackluster employment report.
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