USD: Can the data convert to more hawks? – Ing

The pressure on the dollar has persisted, since the combined effect of the decrease in geopolitical risk and a moderate inclination of some members of the Fed continues to favor short positions. The president of the Fed, Powell, concluded his two -day testimony before Congress with a wide reiteration that he is still concerned about the impact of tariffs on inflation, and did not reveal much more apart from a strict conditionality in regard to relaxation plans, says Francesco Pesole, FX analyst of ING.

The DXY could be stretched without a moderate revaluation in the Fed expectations

“Powell continues to attract the attention of the Trump administration, and now that two members (Waller and Bowman, both appointed by Trump) are openly disagree with the cautious/hawk posture, the markets could quickly answer with a moderate reevaluation of the expectations before the weak data of the US anticipated for the next president of the Fed are further reinforcing moderate bets. “

“Today, in addition to any additional review in the third publication of the GDP data of the first quarter, the approach will be in the orders of durable goods in May, as well as in the initial applications of weekly unemployment subsidy. The news about the labor market has a significant impact potential now that the May inflation figures have not managed to unleash a moderate response by Powell, despite the fact that the PCE The Fed will only be published tomorrow.

“Fed’s speech can also be quite shocking: today, we will listen to Goolsbee (voter, moderate), Barkin and Daly (not voters, inclined to be hawks), as well as to Hammack (no voter, hawk). The downward risks for the dollar persist, but another 1-2% fall in the DXY will be stretched without a moderate reevaluation The Fed or concerns about tariffs/deficit that resurfaces. “