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Dollar expected to stay in 96 to 100 range into US PCE

BBH expects the next few months to keep the US Dollar Index confined to 96.00 to 100.00 as Fed repricing risks and US fiscal credibility concerns offset a growth advantage.

Reported · Written up by our desk · Major Pairs

Brown Brothers Harriman analyst Elias Haddad said the US dollar is firm and consolidating just above recent lows after a US Treasury buyback announcement, with the US Dollar Index (DXY) likely to remain range-bound.

BBH expects the DXY to trade between 96.00 and 100.00 over the next few months, citing a widening US growth advantage that is offset by risks including potential dovish Federal Reserve repricing and concerns over US fiscal credibility.

Market participants are also looking ahead to the July US Personal Consumption Expenditures (PCE) data, which is expected to keep the Fed on hold if the report echoes softer recent inflation and spending signals.

FXStreet highlighted expectations for PCE to rise 0.1% month over month versus minus 0.1% in June, with core PCE seen up 0.2% m/m versus 0.1% in June, plus additional trimmed mean and median measures due later in the US session.

Latest closeDollar index 99.64 ▼0.3%

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