USD: Markets are less sensitive to inflation news – ING

US initial jobless claims came in once again lower than expected on Thursday, but continuing claims rebounded to 1.834m. Durable goods orders were stronger than expected and the expected revision lower in 2Q GDP from 3.0% to 2.9% didn’t materialize. August PCE data will be released on Friday, ING’s FX analyst Francesco Pesole notes.

DXY to trade in the 100.0-101.0 range near term

“Market pricing for year-end Fed rates inched higher by a few basis points over the past couple of sessions, but the dollar was offered again yesterday after some positioning adjustment on Wednesday. Anyway, markets continue to factor in a 50bp cut at one of the next two meetings.”

“Today, August PCE data will be released. We expect a core 0.2% month-on-month print, in line with consensus, and limited market impact. Even in the case of a small deviation from consensus, the recent shift in the Fed’s focus to the employment side of its mandate means markets are less sensitive to inflation news.”

“We think DXY can stay around in the 100.0-101.0 range for a few days. The next big move may only happen with a jobs data surprise next week.”