USD: Data-driven softness persists – OCBC

💡 DMK Insight

The Dollar’s resilience amidst de-dollarisation talks shows traders should focus on US macro data. With AI-related equity volatility capturing headlines, it’s easy to overlook the underlying strength of the Dollar, which is still largely influenced by economic indicators and Fed policy. As we approach key data releases, such as employment figures and inflation rates, these will be critical in shaping expectations for interest rate movements. If the data comes in stronger than expected, it could bolster the Dollar further, potentially impacting forex pairs like EUR/USD and GBP/USD. Conversely, weaker data could lead to a sell-off, especially if it raises doubts about the Fed’s tightening path. Traders should keep an eye on the upcoming economic calendar and be prepared for volatility around these releases. Watch for the Dollar Index (DXY) to hold above key support levels, as a break below could signal a shift in sentiment. The real story is how these macro factors will interplay with the ongoing narrative of de-dollarisation, which, while significant, hasn’t yet translated into a tangible threat to the Dollar’s dominance.