DXY: Dollar Index Rebounds 1% as Traders Ramp Up Long Bets Ahead of PCE Inflation
Fed’s favorite inflation gauge is slated for release today with analysts expecting to see a slight uptick to 2.7% in July.
- The dollar index
DXY bounced back from a double bottom pattern with bulls powering the index by 1% over the past couple days. Forex traders ramped up their long positions on the greenback, lifting its valuation against a basket of six currencies to 101.50 early Friday, from a weekly low of 100.50. Volatility is expected to pick up today with the release of a major economic report. - PCE inflation, short for personal consumption expenditures, is about to show if price pressures continued to subside in July. The majority of analysts don’t seem to think so — projections are sitting at a 2.7% increase, a slight uptick from the 2.6% logged in June. Still, a modest gain that shouldn’t sway the Federal Reserve from its path toward lowering interest rates.
- Markets have already priced in a 25bps trim to borrowing costs when Fed officials meet in September. This said, if today’s inflation print reads better than expected, traders might bump up their hopes to a bigger jumbo-sized 50bps cut to interest rates. Quick take: the dollar was higher across the board to start trading on Friday — the EUR/USD pair was floating near $1.1075 and the GBP/USD was seen at $1.3160. Both currency pairs were on track for the third straight day of losses.
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Fed’s favorite inflation gauge is slated for release today with analysts expecting to see a slight uptick to 2.7% in July.
- The dollar index DXY bounced back from a double bottom pattern with bulls powering the index by 1% over the past couple days. Forex traders ramped up their long positions on the greenback, lifting its valuation against a basket of six currencies to 101.50 early Friday, from a weekly low of 100.50. Volatility is expected to pick up today with the release of a major economic report.
- PCE inflation, short for personal consumption expenditures, is about to show if price pressures continued to subside in July. The majority of analysts don’t seem to think so — projections are sitting at a 2.7% increase, a slight uptick from the 2.6% logged in June. Still, a modest gain that shouldn’t sway the Federal Reserve from its path toward lowering interest rates.
- Markets have already priced in a 25bps trim to borrowing costs when Fed officials meet in September. This said, if today’s inflation print reads better than expected, traders might bump up their hopes to a bigger jumbo-sized 50bps cut to interest rates. Quick take: the dollar was higher across the board to start trading on Friday — the EUR/USD pair was floating near $1.1075 and the GBP/USD was seen at $1.3160. Both currency pairs were on track for the third straight day of losses.