US Dollar: Breakout risks versus fading outlook – Societe Generale
Societe Generale’s Kit Juckes argues that while the longer-term outlook for the Dollar is deteriorating due to US politics and changing global savings patterns, the short-term picture remains constructive.
Societe Generale economist Kit Juckes contends that while the Dollar's long-term prospects are dimming due to US politics and shifting global savings habits, the near-term outlook remains promising. The Dollar Index could approach its 2026 peak and EUR/USD could hit new lows, even as potential obstacles arise. Upcoming US economic data, such as JOLTS, ADP employment, personal income and spending, trade, ISM surveys, and labor market data, suggest a robust economy with little sign of deceleration.
Inflation data, including the August core PCE deflator, might exceed expectations at 3.4%, bolstering the Dollar Index or pushing EUR/USD to fresh lows. Factors such as higher US yields, oil price pressure on energy importers, and a strong US economy against inflation fears support the Dollar's positive short-term trajectory.
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