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US Dollar May Rise as News-Flow Bolsters Fed Policy Outlook

US Dollar May Rise as News-Flow Bolsters Fed Policy Outlook

Ilya Spivak,

Talking Points:

Another quiet day on the European economic data front is likely to keep the spotlight on US economic news-flow through the end of the trading week. May’s PPI figures and June’s University of Michigan Consumer Confidence gauge are on tap. Core wholesale inflation is expected to edge narrowly lower to 0.7 year-on-year, marking the weakest reading in almost five years. Meanwhile, the sentiment gauge is seen moving higher to 91.2 after printing a six-month low at 90.7 in May.

Realized US data outcomes havesteadily improved relative to consensus forecasts since mid-May, suggesting analysts are underestimating the vigor of the world’s largest economy and opening the door for upside surprises. Such results may encourage an up-shift in investors’ expected timeline for the first post-QE interest rate hike, boosting the US Dollar. As it stands, priced-in bets reflected in Fed funds futures suggest markets continue to see the onset of tightening in October.

The Australian Dollar declined in otherwise quiet overnight trade. The move tracked a fractional downswing on the S&P/ASX 200 stock index, pointing to ebbing risk appetite as the likely catalyst behind selling pressure. Financial shares led the equities benchmark lower in a move that may have reflected a response to comments from ANZ CFO Shayne Elliot said he expects regulars to ask lenders for higher capital levels. ANZ is Australia’s third-largest bank.


Asia Session

22:30NZDBusinessNZ Manufacturing PMI (MAY)51.5-51.7
22:45NZDFood Prices (MoM) (MAY)0.4%--0.3%
01:30AUDCredit Card Purchases (A$) (APR)22.9B-25.6B
01:30AUDCredit Card Balances (A$) (APR) 51.1B-51.2B
04:30JPYIndustrial Production (MoM) (APR F)1.2%-1.0%
04:30JPYIndustrial Production (YoY) (APR F)0.1%--0.1%
04:30JPYCapacity Utilization (MoM) (APR)-0.4%--1.2%
04:30JPYTertiary Industry Index (MoM) (APR)-0.2%0.4%-1.0%

European Session

08:30GBPConstruction Output SA (MoM) (APR)0.1%3.9%Low
08:30GBPConstruction Output SA (YoY) (APR)0.5%1.6%Low
09:00EUREurozone Industrial Production (MoM) (APR)0.4%-0.3%Medium
09:00EUREurozone Industrial Production (YoY) (APR)1.1%1.8%Medium

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3

--- Written by Ilya Spivak, Currency Strategist for

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.