The U.S. dollar index has data from the EUR v USD pair that will drive the week’s price action.
USDX – Daily Chart
The USDX failed to see strength in a recent push back to the 99.00 level. The index now trades under the 97.92 level and could head lower to 97.00 and the July lows of 96.37 next.
Key data for the dollar index this week will focus on the latest consumer price inflation data from the eurozone on Tuesday at 5pm HKT. Markets expect the number to be in line with last month’s annual rate of 2.3%. The latest U.S. manufacturing data will also come overnight into Wednesday ahead of ISM services data on Thursday.
The key release will be the non-farm payroll jobs number from the U.S., where a weak number will only add to the expectations for September. The belief that the Federal Reserve will begin a cutting cycle has left the USDX under pressure near recent lows.
“The deterioration in the jobs market is notable, with consumer sentiment even weaker than official data suggests. Our economists now expect the tariff-driven inflation spike to be milder and short-lived. As they discuss here, our new base case is 25bp cuts in September, October and December, followed by 50bp of easing in 2026 and a terminal rate of 3.25%, in line with market pricing,” ING anlaysts said.
“Our macro team haven’t completely ruled out one final ECB rate cut this year – but even so, the late 2025 and 2026 story should be a benign one, with the Fed playing catch-up,” they added.
