FXStreet (Edinburgh) – Kit Juckes, Strategist at Societe Generale, sees the dollar could be well supported during the next month.
“The Chinese Government’s decision to stop large-sale share purchases in order to boost the equity market, resulted in a relatively modest fall in local equity prices and a generally risk averse session in Asia”.
“The wait for Friday’s US labour market report has been spiced-up by a hawkish tinge to Fed vice-Chair Fischer’s comments at Jackson Hole and 2yr Treasury yields are back up to 72bp, where they were two weeks ago before last Monday’s equity market slide”.
“That’s taken the 2yr rate differential between the US and Germany back up too but it doesn’t really clear the air, just leaves us waiting for the FOMC meeting in two weeks’ time as the main driver of trends”.
“With an expectations of robust US data, we expect the dollar to be ‘bid’ in September although further weakness in commodity prices and continued equity market volatility may still mean this is more visible in G3 gaining vs ‘the rest’ than in intra-G3 moves”.
“Still, if better US data does send short-dated US yields higher, the dollar should be the pick of the G3 and we like being long vs. CAD and NZD”.
Kit Juckes, Strategist at Societe Generale, sees the dollar could be well supported during the next month…
(Market News Provided by FXstreet)