United States Dollar Index trades flat at the start of the US NFP data week
The US Dollar (USD) starts the week on a steady note, with the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trading calmly near 101.35.
However, investors brace for high volatility in the counter as an array of United States (US) data is scheduled to be published this week, especially the Nonfarm Payrolls (NFP) data for June, which will be released on Thursday.
Investors will pay close attention to the US NFP data to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook. According to the CME FedWatch tool, there is almost 90% chance that the Fed will deliver at least one interest rate hike this year.
Since the Fed’s first monetary policy announcement in the middle of the current month under new Chairman Kevin Warsh, the importance of data in monetary policy expectations has increased, as comments from Warsh indicated that the central bank will talk less in the current circumstances.
“Absent, also, is so-called forward guidance—which we agreed was not well suited to the current policy conjuncture,” according to the transcript of Chairman Warsh’s Press Conference.
This week, investors will also focus on the US JOLTS Job Openings data for May, and ISM Manufacturing and Services PMI data for June.
On the global front, investors await talks between the US and Iran in Qatar after the exchange of attacks in the last several days near the Strait of Hormuz, a critical chokepoint to one-fifth of global energy flows.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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