![]() Download the US Dollar quarterly outlook for a longer-term view of market trends Navigate the forex market with confidence and improve your strategies. Given these positive developments, the Atlanta Fed's GDP Nowcast indicates that output is poised to grow at an annualized rate of 5.6% in the third quarter. For instance, the ISM services sector PMI jumped in August to 54.5 from 52.7 previously, topping all projections and reaching its strongest reading since February. Recent data has shown that the economy, rather than weakening, has reaccelerated this summer, contrary to historical experience in times of aggressive central bank monetary policy. Despite the forceful actions by the Fed, the current tightening cycle is likely not yet over, considering the prevailing macroeconomic conditions. The FOMC has raised borrowing costs 11 times since 2022 as part of a strategy to quash rampant inflation, bringing its benchmark rate to a range of 5.25% to 5.50%, the highest in 22 years. ![]() US DOLLAR INDEX VERSUS US TREASURY YIELDS The chart below shows how the DXY index has closely tracked the uptrend in U.S. Treasury yields on the back of a hawkish repricing of the Federal Reverse’s policy path. This marked its eighth consecutive week of gains and the longest winning streak since 2014 – a bullish run catalyzed by the resurgence in U.S. dollar, as measured by the DXY index, closed the week above the psychological 105.00 handle, settling around its highest level since early March. ![]() Most Read: USD/CAD Dips on Solid Canadian Data but Broader Outlook Tied to US Inflation ![]()
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