Dollar rally pauses as Fed & US data disappoint

Following a strong run over the past month, the US dollar has weakened across the board this week after some softer-than-expected US data and a non-committal FOMC. Next week’s key data releases include the ISM manufacturing survey and the all-important non-farm payrolls report. We expect further disappointment on the data front, which could easily lead to a deeper retrenchment for the greenback. That said, its recent strength has been driven to a significant extent by worries about the spread of the “delta” variant and risks in China’s economy and financial system. Both remain wildcards that may keep the dollar strong near term.
Jonas Goltermann Senior Markets Economist
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