USD: Flickers of life - Westpac

The US dollar showed some flickers of life last week, notably rising in response to disappointing jobs data, explains Imre Speizer, Research Analyst at Westpac.

Key Quotes

“It’s early days, and the threat of a government shutdown will hang over the dollar for the next month. But our data surprise index does show the economy is beating expectations which would justify any sustained rebound in the dollar.”

“The US event calendar this week is confined to the ISM/ Markit service sector PMIs, Fed Beige Book and seven Fed speakers.”

“3 months ahead: Q4 offers a more forgiving environment for the USD than Q3. Washington is rushing into another debt ceiling and government shutdown showdown in Sep/Oct. But by Q4, these event risks will have been negotiated, seasonals are more supportive, and Trump reflation will enjoy a fresh burst of energy as Washington pivots towards tax cuts.”