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DXY: LIKELY BE CAPPED AROUND 103.30 – DBS

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This month’s recovery in the Dollar Index (DXY) from 101.2 will likely be capped around 103.30, DBS’ FX analyst Philip Wee notes.

Waiting for Fed speakers

“The futures market has trimmed its Fed cut bets, aligning with the Fed’s projection for two 25 bps cuts in November and December. Fed officials have played down the higher-than-expected US nonfarm payrolls and CPI inflation readings.”

“This week’s Fed speakers should uphold the narrative that the US economy and labour market are back in better balance compared to two years ago, allowing inflation to return to the 2% target next year.”

“The International Monetary Fund (IMF) will release the World Economic Outlook on October 16 and agree with the Fed regarding the scope for high interest rates to move from restrictive towards neutral levels.”


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