Dollar May Stabilize as US Growth Edges Out Fiscal Concerns

The US dollar weakened against major currencies and gold after the Treasury's buyback announcement. However, according to Brown Brothers Harriman's (BBH) Elias Haddad, this weakness may stabilize due to the US growth advantage.

Haddad notes that the US growth edge over other major economies can offset some of the structural drag to the USD from worsening US fiscal credibility.

The composite PMIs reflect this widening growth gap. The upcoming ADP private employment change for the week ending August 8 will be a key indicator, with futures implying modest further Fed tightening but risks skewed toward a dovish repricing as inflation and labor data remain contained.