Economists at ING discuss USD’s outlook. DXY seen contracting on the back of the ECB hike The broader Dollar story is firmer now heading into next wee
The broader Dollar story is firmer now heading into next week’s Federal Reserve meeting. A hike is unlikely, and dot plots will move the market. If the blip in the disinflation process that emerged in these August figures prevents a big dovish revision of the 2023 dots, then the evidence of US economic resilience since the last projections means the 2024 dots could be revised higher.
We see DXY contracting on the back of the ECB hike, but we don’t expect the EUR/USD rally to be long-lived: the Dollar Index could be trading back around 104.50/105.00 before the Fed meeting.Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets.
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