US Dollar Set for Boost from Upcoming Inflation Data
US Dollar prices have retreated from recent highs due to lower oil prices and comments from New York Fed President John Williams, which tempered expectations of a rate hike. However, upcoming US data is expected to reinforce the Federal Reserve's hawkish stance and support further USD strength.
Brown Brothers Harriman notes that while the modest pullback in crude oil prices has eased some pressure on the Dollar, sticky inflation remains a concern. The firm expects the August Personal Consumption Expenditures (PCE) data to show a 0.3% monthly increase versus 0.2% in July, with the year-over-year rate remaining unchanged at 3.7%
Furthermore, the September ADP private payrolls are seen increasing by +72k compared to +38k in August. This rebound in consumer spending and resilient labor demand is expected to bolster the Dollar.