USD: Quiet consolidation – ING

The dollar has quietly gone a little bid this week. We're not sure what's driving it, but we wouldn't read too much into it at this stage. Perhaps it's just that sitting short dollars is expensive with one-week dollar rates still well above 4.00%, ING's FX analyst Chris Turner notes.

Market moves may be limited

"There hasn't really been that much progress on Ukraine this week, despite European leaders hailing a 'breakthrough'. Let's see whether any more details emerge about the level of support the US is prepared to offer Europe in defending Ukraine, and also whether President Putin is prepared to accept European boots on the ground in Ukraine – the threat of which (under NATO) prompted Russia to invade Ukraine in the first place."

"In terms of the calendar today, we have prospective Fed Chair front-runner Christopher Waller speaking at 17CET, though the subject here is payments. More interesting will be the FOMC minutes released at 20CET, which will air more of the views of the two dissenters (Waller and Bowman) who voted for a rate cut in July."

"Market moves, however, may be limited given that the July jobs report was released a few days later. A much better read on the Fed situation should emerge on Friday afternoon during Chair Powell's speech at Jackson Hole. In all, we don't see the need for big DXY moves today and struggle to see it breaking above 98.50/60 resistance."