US dollar outlook: headed to below 100 before rebounding - Westpac

Ross J Burland FXStreet

Analysts at Westpac offered their outlook for the US dollar.

Key Quotes:

"US dollar factors: 1 week: After a strong run during February and early March, the US dollar has flipped into negative mode, the main catalyst being the FOMC meeting last week which stressed gradualism in its tightening cycle. The US dollar index (DXY) could easily fall to the multi-month range low of 99. This week’s event calendar is thin: new and existing home sales, and durable goods orders. Fedspeak will be more important and plentiful, including Evans, George, Mester, Kashkari, Kaplan, Bullard and Yellen.

3 months: We suspect the USD will falter into mid-year, but resume its uptrend thereafter. Watch the repeal and replacement of Obamacare. Delays here will push out the timetable for tax reform/tax cuts/ infrastructure and will provide an early acid test of the cohesion of the Republican Party. High risk that tax reform could run afoul of challenging political realities: even if Senate filibuster risks can be dodged via the 2018 reconciliation bill (needing just a simple majority vote) great swathes of the Republican Party remain lukewarm on infrastructure, border adjusted taxes and funding spending plans by gutting government agencies.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

AUD/USD shows resilience below 38.2% Fibo. near mid-0.7100s

The AUD/USD pair touches a one-and-a-half-week low, around the 0.7140 region during the Asian session on Monday, though it lacks follow-through. Spot prices currently trade just above mid-0.7100s, down nearly 0.25% for the day.

USD/JPY: Japanese Yen edges lower vs USD amid Middle East jitters as Fed, BoJ meetings loom

The USD/JPY pair attracts some buyers at the start of a new week and climbs closer to the 154.00 mark during the Asian session, reversing a part of Friday's losses. Spot prices, however, remain confined in a range held over the past week or so and within striking distance of a nearly seven-month low, touched last Tuesday, as traders await this week's key central bank events.

Gold: Fed’s rate decision to drive the next move

Gold reflects a subdued performance at the start of the Federal Reserve’s (Fed) monetary policy week at around $4,330. Fed’s interest rate expectations heavily influenced last week after the release of the hot United States (US) Producer Price Index (PPI) and Consumer Price Index (CPI) reports for August.

Pi Network extends gains as ecosystem development supports recovery

Pi Network (PI) extends its recovery on Monday, trading above $0.097 after two consecutive weeks of gains. Continued ecosystem development and improved developer tools are boosting utility. Meanwhile, the technical indicators point to a tentative recovery, but overhead Exponential Moving Averages remain a challenge and cap PI gains.

Canada CPI expected to show steady inflation in August

Canada’s August Consumer Price Index figures will be the focus of attention when published on Monday. Indeed, Statistics Canada data will provide markets with an update on price pressures following the Bank of Canada’s September 2 meeting, when officials kept the interest rate steady at 2.25%, broadly in line with analyst consensus.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.