The US dollar (USD) has given back most of yesterday’s gains and remains stuck in a narrow range this month. Broader headwinds from US trade protectionism, political interference at the Fed, and dovish policy expectations continue to exert pressure on the greenback, while narrowing yield spreads relative to its peers reinforce a weaker bias. Upcoming jobless claims and a speech by Governor Waller will be key drivers later today.
The US weekly Jobless Claims data is in the spotlight today. Initial Jobless Claims are expected to fall to 230,000 after rising to 235,000 in the week ending August 16, which was the highest since June. A further increase in new filings risks adding to labor market concerns and raising speculation of a federal funds rate cut. Federal funds rate futures are pricing in a nearly 90% chance of a 25-bp cut at the September 17 meeting and a total of 50 bp of easing by year-end.