Dollar set to remain in spotlight ahead of labor data & beige book
September 6th - After a run of profit taking off an arguably oversold dollar yesterday, currency markets have had a generally quiet overnight session. However, with key economic numbers due for release from the US right through today’s session, there’s plenty of scope for further volatility in the coming hours. Although consensus is emerging that the Fed is surely through with its run of rate hikes, some lingering doubts remain and as such, traders may jump on any note of inflationary pressures today to send the dollar higher still in the short term. Unit labor costs will be closely watched in the first instance as obviously wage inflation needs to be kept in check although greater significance is likely to rest on the Fed’s beige book which is due well into the session. Here, another strong signal that the US economy is slowing would stand to underline the need for a more relaxed approach to monetary policy perhaps in turn seeing the dollar give back some of the recent gains. Either way, the prospect of further volatility on the major dollar crosses through today’s session cannot be ignored.
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