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Dollar seen rangebound as Fed hike odds fade, OCBC says

OCBC links the near-term USD trading range to still-attractive USD carry and softer US data, while markets await the July FOMC minutes for clarity.

Reported · Written up by our desk · Major Pairs

OCBC analysts Sim Moh Siong and Christopher Wong say the US dollar should remain rangebound in the near term, supported by relatively attractive USD carry and weighed by softer US economic data that has lowered the odds of a September Fed hike.

They add that as long as long-end US yields do not rise much further, risk assets and carry trades could stay supported, with July FOMC minutes expected to provide more detail on policymakers' inflation views and rate intentions.

FXStreet also notes that markets are focused on the July FOMC minutes and are looking for clarity on whether policymakers will maintain rates unchanged, with attention on reported differences among regional Fed presidents.

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