USD: Momentum lost amid lacklustre data – Swissquote

FXStreet (Delhi) – Arnaud Masset, Market Analyst at Swissquote, notes that the US currency is loosing momentum against majors after the first batch of economic data from the US was roughly in line with market expectations but traders will therefore have to wait for Friday’s NFPs to have a little more clarity on the timing of the first rate hike by the Federal Reserve.

Key Quotes

“Personal income (s.a.) edged down to 0.3%m/m in August, lower than median estimates of 0.4% and the revised increase of 0.5% in July. Personal spending rose 0.4%m/m, beating an anticipated 0.3%.”

“On the inflation front, core personal consumption expenditure improved slightly in August, easing some of the Fed’s worries. The gauge moved back to 1.3%y/y from 1.2% a month earlier. However, this is not good enough in our opinion as the gauge is still far below the 2% threshold.”

“Finally, pending home sales contracted -1.4%m/m in August versus 0.4% median forecast and 0.5% in July, while the Dallas Fed manufacturing outlook stayed in negative territory, printing at -9.5 in August, from -15.8 the previous month.”

“All in all, the data failed to provide support to the greenback as Fed’s Dudley recalled that the US central bank’s policy remains data dependent.”