Dollar holds firm ahead of European markets open


The greenback continues to pull ahead after the Fed and Powell yesterday

WCRS 01-08

The greenback is maintaining its advance as we begin the European morning, backed up from the Fed statement and Powell’s (mess of a) communication yesterday.

The clues point to an “insurance” rate cut with future policy decisions to be dependent on incoming data. Thus far, markets are less convinced we’ll see one in the coming months. The odds of a September rate cut have fallen from ~76% to just about ~62% currently.

As such, the dollar is still leading gains with the Australian dollar also being the more steady of the major bloc with little change seen in AUD/USD. Better-than-expected manufacturing data is one of the reasons for the boost in the aussie.

Other than that, the focus remains on how markets will digest the Fed decision ahead of US non-farm payrolls data tomorrow with the Bank of England also set to add to the central bank drama later on in the day.

Source link