Dollar Consolidation: US Data Looms as Key Driver for Next Move

US Dollar prices have been consolidating after their recent post-FOMC spike, according to OCBC strategist Christopher Wong. The dollar eased modestly as UST yields and Oil retraced from their post-FOMC spikes.

The move is seen as consolidation by Wong, who believes that further USD gains will require another leg higher in UST yields. He notes that the Fed's higher rate path may be supportive for the USD, but with a fair amount of hawkish expectation already priced, further gains may need another increase in UST yields.

Wong emphasizes that attention should shift back to US data on activity, labour markets, and inflation. Any moderation in these areas could prompt an unwinding of rate expectations and reopen downside in the USD.