Dollar crosses to keep stabilising until Friday’s US PCE – ING
FX markets are still struggling to find direction. Economists at ING analyze Dollar’s outlook.
Keep an eye on a speech by the Fed’s Christopher Waller
Today, monthly wholesale sales and inventory revisions are the only data releases on the calendar along with the weekly MBA mortgage applications. It will be more interesting to hear what the Federal Reserve's Chris Waller has to say on the economic outlook. Waller is generally considered a hawk, so it will be interesting to see how he reacts to the latest data releases.
When it comes to Fed pricing, we doubt expectations for the June meeting will change much this week unless we see a surprise in Friday’s PCE. There is still 19 bps priced in for June and 78 bps by year-end, which pretty much mirrors the March median dot plot.
Some quarter-end flows may slightly mix up the FX picture today, but the Dollar appears in stabilisation mode.