US dollar is one of the best performing G10 currencies today, dropping only against Japanese yen (JPY) and Australian dollar (AUD). USD caught a bid following better-than-expected services ISM data for August, that showed an unexpected improvement in services sector, driven by higher readings of prices paid, employment and new orders subindices. As a result, an increase in hawkish Fed bets could be spotted on swaps. While money markets still see an around 10% chance of a 25 bp rate hike at the September meeting, pricing for November meeting jumped from around 45% to around 55% now. While this is not a massive jump, a key takeaway is that markets now see a rate hike in November as a more likely outcome than Fed staying on hold. However, it should be noted that there is still a long way to go until November meeting and a lot will happen before it - a number of key US macro reports will be released and, of course, Fed will meet to decide on rates in September!
เริ่มเทรดทันทีวันนี้ หรือ ลองใช้บัญชีทดลองแบบไร้ความเสี่ยง
เปิดบัญชี ลองบัญชีเดโม่ ดาวน์โหลดแอปมือถือ ดาวน์โหลดแอปมือถือFed swaps pricing in an over-50% chance of 25 basis point rate hike at November meeting. Source: Bloomberg Finance LP
Taking a look at US dollar index (USDIDX) at D1 interval, we can see that the index has climbed to the mid-term resistance zone ranging below the 38.2% retracement of the downward move launched in mid-2021 (105.00 area). The index is trading at the highest level in half a year and should we see a break above the aforementioned 105.00 area, which also acts as the upper limit of the trading range, we may see a bigger upward move. Textbook range of the breakout from this range suggests a possibility of the index moving as high as 109.20 area.
Source: xStation5
