US Dollar May Bounce on Q2 GDP Revision, ADP Jobs Data
- Aussie, NZ Dollars rise as markets’ dovish Fed view returns to focus
- US Dollar may gain as Q2 GDP revision, ADP jobs data outperform
- Euro at risk on German CPI data but follow-through to wait for ECB
The US Dollar fell in Asia Pacific trade in a move that might reflect pre-positioning before key economic data shaping Fed policy bets begins to cross the wires. The yield-sensitive Australian and New Zealand Dollars duly rose, which seemed to speak to the markets’ skepticism about the US central bank’s wherewithal to deliver another rate hike. The probability of such an outcome is now priced in at just 29 percent.
A revised set of second-quarter GDP figures as well as ADP employment statistics are due to cross the wires. The former is expected to show a slight upgrade while the latter points to a pickup in private-sector hiring in August. US economic news-flow has notably improved relative to baseline forecasts since mid-June however. More of the same may cast doubt on the dovish narrative, sending the greenback upward.
German CPI figures headline the data docket in European hours. The headline inflation rate is seen edging up to an on-year rate of 1.8 percent, the highest in four months. Analyst projections have overestimated regional price growth in recent months however, opening the door another disappointment that might send the Euro downward. Follow-through seems unlikely before next week’s ECB meeting however.
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** All times listed in GMT. See the full DailyFX economic calendar here.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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