- The US Dollar Index is expected to stay steady around 98.65 during Friday’s Asian trading session.
- In August, the US experienced an uptick in combined PMI, driven mainly by a recovery in manufacturing.
- Later on Friday, attention will be on a speech by Federal Reserve Chairman Jerome Powell.
The US Dollar Index (DXY), which assesses the dollar’s value against a group of six major currencies, is projected to trade flat near 98.65 in early Asian sessions on Friday. Many traders are gearing up for Jerome Powell’s speech, which could guide expectations about potential interest rate cuts.
Recent data from S&P Global indicated that the combined PMI for the US rose to 55.4 in August. Specifically, manufacturing improved significantly, climbing from 49.8 in July to 53.3 in August, surpassing the forecast of 49.5. On the other hand, the service PMI saw a slight dip from 55.7 to 55.4, yet it still exceeded the anticipated 54.2.
Comments from Chicago Federal President Austan Goolsbee hinted that the upcoming federal conference in September may lead to more decisive actions. He expressed that the current economic signals are mixed, suggesting the Fed could benefit from more data before making decisions. Cleveland Federal President Beth Hammack emphasized the significance of maintaining a careful, restrictive policy to combat inflation, noting that there’s no urgency to lower rates based on the existing information.
Improved economic indicators from the US and cautious tones from Fed officials might lend some support to the DXY. Data from the CME FedWatch tool suggests a nearly 70% likelihood of interest rate cuts in September, a decrease from the 90% previously projected.
Insights into the Fed’s policy direction will be anticipated during the annual Jackson Hole Symposium later on Friday. Analysts are speculating that Powell’s remarks may indicate a shift that could affect the US dollar’s short-term trajectory.
