Wider risk aversion in global markets is supporting the US dollar undex after yesterday's better-than-expected ISM. The Fed's so-called Beige Book was also published yesterday, here are the key findings from it:
- Many surveyed traders respond on wage growth suggested that the second half of the year will bring a cooling off in this regard.
- Fed districts reported mixed data on loan demand. Almost all showed business expectations that wage growth will slow significantly in the near term
- Some regions highlighted reports suggesting that consumers are running out of savings and relying more on borrowing to support spending.
- Job growth was limited across the country, and economic growth moderated in July and August.
- Most districts saw an overall slowdown in price growth, with faster growth in the manufacturing and consumer goods sectors.
- Nonetheless, Susan Collins, president of the Federal Reserve Bank of Boston, indicated that further monetary tightening may still be necessary, with James Bullard, former president of the Federal Reserve Bank of St. Louis, also expecting another rate hike - despite mixed macro signals.
Economists raised their GDP forecasts after the latest wave of macro data proved stronger in every category, from consumer spending to residential investment. The last time policymakers updated their calculations was three months ago, and at the time there was widespread belief that the US economy's expansion would stall in the current quarter - favoring the US dollar.
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Create account Try a demo Download mobile app Download mobile appLooking at the chart of contracts for the dollar index (USDIDX) on the D1 interval, we see that the price is approaching a key resistance zone at 105.1 points (38.2 abolition of the 2021 upward wave). A potential overcoming of 105 pts could open the way to 108 pts or initiate a corrective move to the area of the SMA200, near 103 pts.
Source: xStation5
