The US macro story is increasingly pointing to a softening in the dollar. The three main data releases this week are the ISM survey results (manufacturing today, services on Wednesday), the FOMC minutes (Wednesday), JOLTS job openings for May (Thursday) and June’s jobs report (Friday), ING’s FX analyst Francesco Pesole reports.

DXY to break below 105.00

"The ISM PMIs are expected to show a marginal improvement in manufacturing – while remaining in contraction – and a softer services figure, while still in expansion. There is a chance the surveys won’t be adding much more to the activity narrative. Instead, jobs figures should set the undertone for markets outside of the impact of EU political developments until June CPI figures are released on 11 July."

"We’ll hear what Federal Reserve (Fed) Chair Jerome Powell will have to say about this at Sintra’s European Central Bank forum tomorrow. He has generally shown a sanguine tendency when it comes to disinflation, and he may ultimately neutralise the impact of FOMC minutes on Wednesday, which could be more hawkish given the June Dot Plot."

"While we see US macroeconomic data as mostly USD-negative in the coming weeks, we doubt this will translate into a clear-cut dollar decline due to EU political risk. DXY may break below 105.00 on softening US jobs figure and a dovish Powell this week, but may then encounter increasing support below that level."