US dollar is back in the red after briefly rising earlier this week.

The US Dollar (USD) starts on the back foot again on Friday, as it has on practically every trading day this week. As a result, there is no problem, given that the US Dollar Index has posted three consecutive days of advances. The impact of Thursday’s lower-than-expected Initial Jobless Claims number is swiftly fading, and with an empty calendar ahead, it could be a day of additional outflow for the US dollar ahead of The weekend.

On the economic data front, the calendar is empty, with no data points to impact markets or the US dollar. This suggests that either headlines or geopolitical developments will push markets until the week’s close. The weekly closing for the US Dollar is critical ahead of next week’s release of the US Consumer Price Index (CPI) and US Retail Sales data for July.

Daily digest market movers: US Dollar index closed above a critical threshold on Thursday.

A bunch of US Federal Reserve (Fed) members offered a few comments overnight about where they see Fed policy currently:
Austan Goolsbee, President of the Federal Reserve Bank of Chicago, stated that the Fed is following markets. This has no bearing on Federal Reserve policy. Goolsbee also expressed concern that the Fed would cut so soon to the US election.
Kansas City Fed President Jeffrey Schmid stated that it is appropriate to cut when inflation remains low. Schmid also remarked that the job market is currently in excellent shape.
China’s report this week remained highly disappointing, as imports outpaced exports, turning the country’s primary exporter into an importer for the month of July. Consumer prices rose 0.5% in July compared to the same month last year, raising new concerns. The People’s Bank of China (PBoC) may be obliged to hike rates in order to contain inflation, although it wants to keep rates low, if not lower, to enhance exports.

Equity markets appear to be showing two faces, with Asian equities.

On Friday, equity markets appear to be showing two faces, with Asian equities expected to close in positive territory while European indices and US futures are slightly negative.
The CME Fedwatch Tool predicts a 54.5% possibility of a 50 basis point (bps) interest rate drop by the Federal Reserve (Fed) in September, compared to a 45.5% chance of only 25 bps. Another 25 bps cut (assuming September is a 50 bps cut) is projected by 51.9% in November, with a 15.8% possibility of a 50 bps cut and a 32.3% likelihood of no cut penciled in for that meeting.
After briefly rising beyond 4.00% on Thursday, the US 10-year benchmark rate now trades at 3.97%.