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Dollar holds firm as markets price a September Fed hike

ING expects the US Dollar Index to find support near 99.35 to 99.40, with US jobs data and ISM manufacturing in focus this week.

Reported · Written up by our desk · Major Pairs

ING’s Chris Turner said the US dollar is not broadly weaker despite joint FX intervention in USD/JPY and lower oil prices, because markets still appear to be pricing a Federal Reserve hike in September.

Turner pointed to unresolved uncertainty about whether the Fed can avoid a September increase, arguing the bank would likely need US data to be weak enough to rule out a hike.

The week’s US catalysts highlighted by ING include jobs data such as JOLTS job openings, ADP, and Friday’s non-farm payrolls, with the consensus for non-farm payrolls around plus 75,000 to plus 80,000.

ING added that with the case for a sustained sell-off in the dollar not yet made, it sees the US Dollar Index, DXY, supported near 99.35 to 99.40, with a potential move back above 100 later this week.

Latest closeUSD/JPY 157.40 ▼1.7%|Dollar index 99.80 ▼0.2%

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