Downbeat US manufacturing and services PMI on Wednesday triggered a material slide in the US dollar globally, even as Euro area and UK factory output contracted. The outsized response to otherwise not-so-bad (single set of) data -- at least in terms of levels of the PMIs compared with its peers – is a reflection of the broader mood. This is especially true given the most recent set of data, including industrial production, retail sales, and housing starts looked solid.
The key focus is now on US Federal Reserve Chair Jerome Powell is due to speak on Friday at the three-day meeting of central bankers at the Jackson Hole Economic Symposium beginning Thursday. A balanced, data-dependent assessment could provide an excuse for a further retreat in the US dollar globally. However, if Powell’s tone turns out to be hawkish guided by the recent strong US data, then USD’s retreat could be limited.
The key focus is now on US Federal Reserve Chair Jerome Powell is due to speak on Friday at the three-day meeting of central bankers at the Jackson Hole Economic Symposium beginning Thursday. A balanced, data-dependent assessment could provide an excuse for a further retreat in the US dollar globally. However, if Powell’s tone turns out to be hawkish guided by the recent strong US data, then USD’s retreat could be limited.
