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US Dollar Price Volatility Outlook: Data & Fed Cuts in Focus
Abstract：US Dollar currency volatility eyes the barrage of high-impact economic data releases slated for Thursday and how it might sway Fed rate cut expectations.
US DOLLAR CURRENCY VOLATILITY FORECAST – SUMMARY POINTS:
USD currency pairs are expected to continue exhibiting heightened price action on balance judging by elevated overnight US Dollar implied volatility measures
GBPUSD remains in focus as Brexit drama intensifies while key US economic data on deck highlights EURUSD and USDJPY
Check out this weeks US Dollar Price Technical Forecast for additional USD insight
The US Dollar slid considerably during Wednesdays trading session, which largely erased gains recorded earlier in the week. Although, the move was largely driven by the EURUSD and GBPUSD recovering recent losses owing to better-than-expected Eurozone PMI data and the latest Brexit developments.
DXY INDEX – US DOLLAR PRICE CHART: DAILY TIME FRAME (MARCH 28, 2019 TO SEPTEMBER 04, 2019)
Chart created by @RichDvorakFX with TradingView
That said, the DXY Index and US Dollar price action now turns to a swath of high-impact data releases slated for Thursday. The DailyFX Economic Calendar details a comprehensive list of upcoming event risk and economic indicators on deck for release.
US DOLLAR IMPLIED VOLATILITY & TRADING RANGES (OVERNIGHT)
Looking at the latest overnight US Dollar implied volatility, USD price action is expected to be higher on balance. EURUSD overnight implied volatility is above its 5-day average but remains in the bottom 50th percentile relative to the last 12-months. USDJPY overnight implied volatility is interestingly below its 5-day moving average and stands out considering August ISM Services Data could spark a sizable reaction in spot prices and broadly dictate market risk appetite tomorrow.
Disclaimer:
The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.
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KVB Market Analysis | 30 August: JPY Strengthens Against USD Amid Strong Q2 GDP and BoJ Rate Hike Speculation
The Japanese Yen (JPY) strengthened against the US Dollar (USD) on Thursday, boosted by stronger-than-expected Q2 GDP growth in Japan, raising hopes for a BoJ rate hike. Despite this, the USD/JPY pair found support from higher US Treasury yields, though gains may be capped by expectations of a Fed rate cut in September.
NFP Hammers Dollar to 4 Months Low
The aftermath of the Japanese yen's strengthening has manifested in significant dips across multiple markets, including equities, commodities, and various currencies. The yen has erased all its 2024 losses against the dollar, moving towards the 145.00 mark. The dollar index (DXY) has fallen to its lowest level since March, hovering above the $103 mark.
Key Economic Calendar Events for This Week (August 5-9, 2024)
This week's economic events include: Japan's Monetary Policy Minutes and U.S. Services PMI on Monday, impacting JPY and USD. Tuesday's RBA Interest Rate Decision affects AUD, with German Factory Orders influencing EUR. Wednesday sees German Industrial Production and U.S. Crude Inventories impacting EUR and USD. Thursday: RBA Governor speaks, with U.S. Jobless Claims. Friday: China's CPI and Canada's Unemployment Rate affect CNY and CAD.
Anticipating the Nonfarm Payroll Report
As we approach the Nonfarm Payroll (NFP) report on August 2, 2024, market participants are keenly observing the data for insights into the U.S. labor market. The report is expected to show an increase of 194,000 to 206,000 jobs for July, indicating modest growth. This suggests potential softening in the labor market. A weaker-than-expected report could prompt the Fed to consider rate cuts, influencing the USD. Major currency pairs and gold prices will likely see volatility around the NFP release
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