Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
US Dollar Forecast: Greenback Vulnerable to Slowdown in US GDP

US Dollar Forecast: Greenback Vulnerable to Slowdown in US GDP

David Song,
Please add a description for the image.

US Dollar Talking Points

The US Dollar Index (DXY) depreciates for the second week after snapping the opening range for October, and fresh data prints coming out of the US may keep the Greenback under pressure as signs of a slowing recovery undermines speculation for an imminent shift in Federal Reserve policy.

Fundamental Forecast for US Dollar: Neutral

The DXY holds near the monthly low (93.50) as Fed Governor Randal Quarles anticipates a slow down in economic activity, with the official acknowledgingthat “supply bottlenecks and labor shortages that have been more widespread and persistent than many expected.”

As a result, a slew of mixed data prints may produce headwinds for the Dollar as Durable Goods Orders are expected to fall 0.2% in September, while the GDP report is anticipated to show the growth rate expanding 2.5% after growing 6.7% per annum in the second quarter of 2021.

Meanwhile, the update to the Personal Consumption Expenditure (PCE) Price Index may encourage the Federal Open Market Committee (FOMC) to scale back monetary support sooner rather than later if the report shows another pick up in in the headline and core reading for inflation, and the recent weakness in the US Dollar may turn out to be a correction in the broader trend as evidence of sticky price growth puts pressure on the central bank to switch gears at the next interest rate decision on November 3.

With that said, the US Dollar may face a larger correction going into the end of the month as the US GDP report is anticipated to show a slowing recovery, but speculation for a shift in Fed policy may keep the Greenback afloat as it lifts longer-dated Treasury yields.

USD Forecast
USD Forecast
Recommended by David Song
Download the DailyFX Forecast for USD
Get My Guide

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

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