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Dollar seen range-bound ahead of July FOMC minutes

ING expects the July FOMC minutes to be less hawkish than earlier Dot Plot signals, keeping the dollar in a tight DXY band and favoring carry trades amid low FX volatility.

Reported · Written up by our desk · Major Pairs

The US dollar is expected to trade in a narrow range as traders look to the release of the July FOMC minutes, with ING highlighting that FX volatility remains low and therefore supports carry-oriented strategies.

ING’s Chris Turner said the dollar is still supported by higher energy prices and long-end US yields, noting that longer-dated Treasuries drew some demand at yields above 5.30% even as broader risks remain skewed upward for rates.

The base case from ING is that the minutes will point to a Federal Reserve that is less hawkish than what prior Dot Plots implied, pointing to no September hike and a slightly softer dollar.

For the near term, ING expects DXY to stay confined to roughly 99.40 to 99.80, while USD/JPY one-day option pricing suggests limited movement, with additional CPI and jobs data, plus the Jackson Hole symposium, viewed as more decisive for September rate expectations.

Latest closeUSD/JPY 158.89 ▲0.9%

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