US Dollar Index is clinging to its 11th weekly positive closing, but it will be a tight call.
The US Dollar (USD) is attempting to scrape out another weekly gain. However this might come down to the wire. If the US Dollar maintains its gains, the US Dollar Index (DXY) will have gained for the 11th week in a row.
While the US Dollar Index often closes each week at its high. That does not appear to be the case this week. With the United StatesWith the United Auto Workers (UAW) union strikes ongoing, more independent workers joining the picket lines. And a US federal government shutdown likely to begin this weekend. The outlook for the greenback is bleak.
Federal Reserve’s (Fed) favored inflation gauge.
On the economic data front, the Federal Reserve’s (Fed) favored inflation gauge. The Personal Consumption Expenditures Index, might give more fuel to the fire. If those components fall further short of expectations, markets may interpret this as a hint that the Fed is done raising interest rates. The rate differential may continue underpin the US Dollar, albeit some repricing may cause it to fall a few digits versus many major currencies in the coming days.
Daily summary: If PCE falls, the US dollar will fall.
At 12:30 GMT, fireworks are expected. the Personal Consumption Expenditure (PCE) index in all of its manifestations: The Core MoM is predicted to remain constant at 0.2%, while the annual component falls from 4.2% to 3.9%. Monthly headline PCE is predicted to climb from 0.2% to 0.5%, with energy being the primary driver. The annual rate is predicted to rise from 3.3% to 3.5%.
Traders will also notice the Personal Income and Spending for the month of August: For the month, income is predicted to climb from 0.2% to 0.4%, while spending is expected to fall from 0.8% to 0.4%.
The Chicago Purchasing Managers Index (PMI) for September is released around 13:45 GMT, with another drop from 48.7 to 47.6 forecast.
The week will conclude with theConsumer Sentiment and Expected Inflation. Bear in mind these are final results, so no genuine shockers are expected here. Consumer sentiment is projected to remain stable at 67.7, while inflation is expected to remain at 2.7%.
Equities are uneven, with Hong Kong’s Hang Seng Index surging over 3% and Japan’s Nikkei and Topix falling at the closing bell on Friday. The Nikkei is even close to a one-month low. In Europe, a recovery appears to be in the works. With European shares marginally in the green and US equity futures following suit.
According to the CME Group FedWatch Tool, markets are pricing in an 82.7% possibility. That the Federal Reserve will maintain interest rates constant at 0.5%.its November meeting.
The benchmark 10-year US Treasury yield is now trading at 4.54%, down from 4.48% earlier this week. With the government shutdown approaching, investors are beginning to buy bonds in order to safely park assets during the weekend.
