Federal Reserve Chairman Jerome Powell sounded cautiously optimistic about disinflation, which, together with recent PCE data, allows markets to continue betting on a Fed rate cut in September, notes Francesco Pesole, analyst at ING.
Fed Minutes are less relevant than the data
“The US Dollar (USD) traded lower yesterday following Fed Chair Powell’s comments in Sintra. As we expected, he was quite optimistic about disinflation, although he continued to warn of the need for caution in the next policy move.”
“Today, the focus will be on a few important data releases: ADP employment, jobless claims, and the ISM services index for June. Job openings for May unexpectedly rose yesterday, but the trend continues to point to the kind of ‘turning point’ in the labor market described by the Fed’s Mary Daly in a recent commentary.”
“The Fed will release the Minutes of the June 12 FOMC meeting. We expect members to express concerns about inflation, although the market impact may not be very large following Powell’s comments in Sintra and recent encouraging data on disinflation. We see some downside risks to the USD from softer US data, but the DXY, which is significantly weighted against the Euro, may not reflect this very clearly.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
