US Dollar: Upside risks persist – ING
ING strategists Francesco Pesole, Frantisek Taborsky and Chris Turner note that a sharp USD/JPY move briefly weighed on the Dollar, but only Australian Dollar and Canadian Dollar held gains.
Strategists at ING, Francesco Pesole, Frantisek Taborsky and Chris Turner, highlight that a brief downturn in the USD/JPY exchange rate initially affected the US Dollar. However, the Australian Dollar and Canadian Dollar experienced gains as the only currencies benefiting from positive domestic news. With the US ISM services index expected to be 54.1, and the odds of a September Fed rate hike being slightly lower, Pesole still favors an upside for the Dollar, driven by front-end rates and rising energy prices.
A significant surge in the yen, possibly due to another intervention, negatively impacted the Dollar, but toward the end of the trading session, only currencies with positive domestic stories (AUD, CAD) retained their gains. ADP payroll data came in at 38k, leaving minimal impact, and market confidence in a September hike slightly decreased, from 18 basis points to 15 basis points.
Today, the focus is on the ISM services report, which is predicted to be at 54.1, making it difficult to push the Fed away from a September hike, particularly for secondary data. The primary risk remains that higher long-term yields may trigger more intervention from the Treasury and a shift in the debasement trade.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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