The US dollar seems set to remain within a tight range against most major currencies this week. At face value, the stronger-than-expected GDP data out of the US might point to a return to “higher for longer”, but the growing evidence of disinflationary pressures there appears to have kept the lid on Treasury yields and the greenback. Meanwhile, other central bankers – notably ECB President Christine Lagarde – have, like Fed officials last week, pushed back on investors’ expectations for rate cuts in the next couple of months. Against this backdrop, our view remains that there isn’t a lot of scope for a much stronger dollar over the coming quarters. That said, next week’s Fed policy announcement, Treasury quarterly refunding announcement (QRA), and key data releases – in particular, the employment cost index and non-farm payrolls – leave no shortage of short-term catalysts for the greenback.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services