USD: A quieter week for US data sees focus shift to housing, tech and Powell – ING

The week ahead should be a quieter one for US data. Last week's softish set of price data did not move the needle substantially on Fed thinking, where the market continues to price just 1-2bp of cuts for the 30 July meeting and 16bp of cuts for the 17 September meeting, ING's FX analyst Chris Turner notes.

Trading inside last week's 97.70 to 98.95 looks likely for DXY

"Short-dated rates seemed to soften a little on Friday after the Federal Reserve's Christopher Waller laid out his case for a July cut. However, Waller remains in the distinct minority of two, and we're probably going to need to see some very soft data, particularly in the labour market, to convince investors that early cuts are coming. Remember that here at ING, we think the Fed could hold back the first cut until December."

"How will US data look this week? Things might be quieter, but the attention will switch to the housing market. Have still-high mortgage rates caused the housing market to seize up? Some are worried that the June existing and new home sales data released on Wednesday and Thursday this week could show some deterioration. On the subject of mortgage rates, US 30-year Treasury yields are lingering around their highs at 5.00%. Investors here will be on the lookout for the results of a $13bn auction of 20-year Treasuries on Wednesday for the latest demand trends."

"It could also be another important week for tech stocks. We've had further earnings reports from Alphabet, Tesla and Intel this week – plus on Wednesday, US President Donald Trump is laying out his plans to 'win the AI race'. Presumably, US big tech will be prioritised here. In the absence of market-moving data, we suspect the dollar can continue to consolidate. It has already had three weeks of consolidation, and in quiet markets, plus 4%+ funding costs being short dollars, there does not seem to be an immediate catalyst for weaker levels. Trading inside last week's 97.70 to 98.95 looks likely for DXY this week."