Future data tracking – OCBC

The US dollar (USD) rose overnight after the FOMC minutes revealed details of rejection at the September FOMC. DXY was last at 102.99, note OCBC FX analysts Frances Cheung and Christopher Wong.

Middle East tensions and the US election are worth monitoring

“At Fedspeaks, Daly said he expected one or two more cuts this year, while Collins said the 50bp cut in September was prudent given the risks. Elsewhere, Logan said he supported a slower rate cut path. Favorable expectations of Fed tapering have now been removed. Markets are only thinking of a 45bp cut for the rest of the year, as opposed to the 75bp cut seen just 2-3 weeks ago. Markets and the Fed’s dot chart are now aligned.”

“The USD has also bounced back, partially retracing the previous ~5% decline seen in Q3. To some extent, the USD may have reached this temporary equilibrium state where the risks here can be largely two-way. Daily momentum remains bullish, but the RSI rally is showing signs of moderating near overbought conditions. Two-way transactions possible. Resistance here at 103.30 (100 DMA). Support at 101.75/90 (50 DMA, 23.6% fibo retracement from 2023 high to 2024 low), 101.30 (21 DMA).”

“Other than US CPI, initial jobless claims (Thursday) and PPI (Friday), there is no clear US data catalyst until the next payrolls or core PCE data in a few weeks. In terms of event risks, geopolitical tensions in the Middle East and the US election are worth monitoring. Even now, Harris and Trump are polling together. Markets taking a cautious stance ahead of the US election could imply that the USD could remain supported on the downside.”