US Dollar: Uptrend seen intact into FOMC – TD Securities
TD Securities strategists note that a softer core United Kingdom (UK) Consumer Price Index (CPI) print triggered initial US Dollar (USD) weakness, but they still expect the broad USD uptrend to remain supported into next week’s Federal Open Market Committee (FOMC) meeting. The team highlights that more directional USD moves are likely once the Federal Reserve provides new guidance, keeping focus on policy communication rather than data alone.
USD uptrend expected to stay supported
"While the core CPI miss has led to knee-jerk USD weakness on the day, we expect the broad USD uptrend to stay supported into next week's FOMC. More directional USD breakouts will likely form on Fed's new guidance."
"Consumer price inflation matched consensus expectations in May, with the headline posting another firm increase at 0.5% m/m (0.473% before rounding; TD: 0.48%, consensus: 0.5%) largely owing to the lingering impact from high crude prices (gasoline +7% m/m). The core segment came in softer than expected, rising 0.2% m/m (0.208% before rounding; TD: 0.23%, consensus: 0.3%). As expected, the deceleration in the core was largely the result of normalization in OER/rents after a surge in April."
"All in, we expect today's CPI report to translate into firmer core PCE inflation at 0.27% m/m in May."
"On Thursday, PPI will grab focus which will give us a better estimate for core PCE for May, with our current estimate at 0.27% m/m. In addition to PPI, jobless claims will be in the morning and the 30y reopening will close out supply for the week."
"While there are signs suggesting tariff pass-through is fizzling out, and services ex-housing inflation cooled in the CPI, the outlook for consumer prices is not constructive in the near term as still-elevated energy prices will continue to pressure supply chains and goods inflation. For now, the path of least resistance for the Fed, amid improving labor-market conditions, is to shift to a more neutral policy posture which is what's broadly expected from the Committee at next week's FOMC meeting."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
As chip stocks plummet, "cybersecurity software" surges across the board, CrowdStrike and Palo Alto Networks hit new highs
CrowdStrike surged 13.8% in a single day to a record high, while Palo Alto Networks soared 13%. The software ETF outperformed the semiconductor ETF by more than 10 percentage points in a single day, marking the largest gap in history. Analysts believe that regardless of the pace of AI development, security demand will only continue to rise. Capital is accelerating its rotation from computing hardware to security software, with segments such as identity management and data governance expected to benefit first.
Altman can afford to wait, but Masayoshi Son can't: OpenAI will not go public this year, exposing a $20 billion gap and a credit weakness for SoftBank.
OpenAI has postponed its public listing, putting its largest external shareholder, SoftBank, in a liquidity crisis. This week, SoftBank is conducting a roadshow in New York, seeking to issue $10-20 billion in bonds to repay the $40 billion bridge loan previously borrowed to increase its investment in OpenAI. According to Bloomberg estimates, SoftBank faces a funding gap of at least $20 billion, and the yield on its existing U.S. dollar bonds has already exceeded 8.5%, with pricing approaching junk status.
Meeting postponed, gold price drops rapidly

The "first metaverse stock" bets on "AI-powered game creation"! Roblox (RBLX.US) competes for creator economy dividends, shares surge nearly 13%
On September 11, after Roblox announced new tools for game developers and features for players at its developer conference, the company's stock price rose by more than 12% on Monday.

