DXY could re-test 93.00 – Westpac

According to Tim Riddell, Macro Strategist at Westpac, the greenback – tracked by the US Dollar Index – remains poised for another test of the 93.00 handle.

Key Quotes

“A clear division of FOMC member views in July and distinct polarisation of recent Fed speakers towards the likelihood or not of rate hikes before year end and through next year will cause markets to be defensive on USD”.

“If Yellen can make a clearer statement on the FOMC’s stance towards (low) neutral rates, markets may become more datasensitive. However, the approach of November’s election will also distract markets into September, rather than consider the 21 Sep FOMC a live prospect for a rate move. A clearer Fed approach would increase market expectations for a data-dependent move in December”.

“USD index remains broadly rangebound, but still appears vulnerable for a retest recent lows near 93, at a stretch 92”.