Fundamental Forecast for the US Dollar: Neutral
- The US Dollar[1] (via the DXY Index) gained +0.65% last week on the back of rising Fed rate hike odds.
- Bond and rates markets are now the most aggressive in their hawkish expectations of the Federal Reserve all year.
- According to the IG Client Sentiment Index[2], the US Dollar has a bullish bias ahead of the September Fed meeting.
US Dollar Aims Higher
After a rocky first few days, the US Dollar (via the DXY Index) gained +0.65% last week on the back of rising Fed rate hike odds. Bond and rates markets are now the most aggressive in their hawkish expectations of the Federal Reserve all year. The largest component of the DXY Index, EUR/USD[3] rates, dropped by -0.71 %, while USD/JPY[4] rates gained +0.09%, hampered by weakness in equity markets.
Elsewhere, gains by the greenback were equally if not more pronounced: GBP/USD[5] fell -0.69%; AUD/USD[6] dropped -1.18%; NZD/USD[7] sank -1.06%; and USD/CAD[8] added +0.65%.
US Economic Calendar Packed, Eyes on Fed Meeting
The middle of September will produce another busy docket of event risk based out of the US. Of course, many of the data releases may see reduced importance as the September Fed meeting dwarfs all else.
- On Monday, September 20, the September US NAHB housing market index will be released.
- On Tuesday, September 21, August US building permits and August US housing starts data are due.
- On Wednesday, September 22, weekly US MBA mortgage applications and August US existing home sales will be released in the morning, while the September Fed meeting and press conference by Fed Chair Jerome Powell will
