The US Dollar Index (DXY) stays near 104.00 following Friday's robust US labour market which translated into USD strength. Economists at ING analyze Greenback’s outlook.
The focus will be on US ISM Services and some important CPI revisions
Today, we see the ISM services data. This is expected to pick up to 52.0 from 50.5. We suspect any soft number today will not be able to turn around Friday's price action in financial markets.
On Friday this week, we will see revisions to the 2023 US CPI series. The Fed's core message at the moment is one of needing the confidence in the disinflation process to cut. These benchmark revisions pose the slight risk that the late 2023 welcome disinflation trend gets revised away – which would be Dollar-positive and risk-negative. So, it is certainly an event risk to watch carefully.
Expect more of this low volatility range-bound trading – 104.00/104.25 on the topside and maybe now 103.20 on the downside for DXY.
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