Dollar Stabilization Ahead: BBH Sees Dovish Repricing After Fed Decision
Brown Brothers Harriman's (BBH) Elias Haddad notes that the US Dollar (USD) has been softer recently, particularly against the Japanese Yen and Swiss Franc. Brent Oil is nearing $100, which may also be influencing the dollar's performance.
According to ADP August private payrolls data, labor demand remains unimpressive, with only 38k private sector jobs added in August compared to a consensus of +47k. The correlation between monthly change in ADP private payrolls and nonfarm payrolls (NFP) is weak, Haddad notes.
Despite this, the latest Fed Beige Book suggests solid economic activity and stable labor markets, with employment rising slightly overall.
The August Services ISM is expected to remain indicative of resilient demand and sticky inflation pressures. The headline index is seen at 54.1 for a second straight month, and the Prices Paid index is expected at 70.0 vs. 70.3 in July.