USD: Dollar continues to drift lower – ING

Tuesday saw another day of US Dollar (USD) selling. Short-dated US rates came off – perhaps as speculation grew over today’s release of benchmark revisions to US jobs data, ING’s FX strategist Chris Turned notes.

DXY might just fall to the 101.00 level

“The Bureau of Labour Statistics will today release revisions, using more accurate tax records, for employment growth in the year to March 2024. Some estimate that it could result in job gains during that period being cut by anywhere between 500,000 and 1,000,000. If so, the Federal Reserve might have seen the jobs market as overly tight during that period and perhaps might now be underestimating the amount of slack that is about to emerge as the economy cools. This data is released at 1600CET and presents a downside risk to the USD.” 

“Later in the day, the Fed releases the minutes of the FOMC meeting on 31 July. Recall this was the meeting when the Fed shifted its focus to its dual mandate. Perhaps we can expect to hear a discussion in the minutes of how the Fed was increasingly comfortable on the inflation side and a little uncomfortable on the employment side.” 

“The DXY sell-off is starting to pick up a little momentum as traders look to jump on possibly an important new market trend. Let’s see how it performs around the 101.00 level.”