US inflation expectations trace downbeat PMI numbers to prod US Dollar


US inflation expectations can be held responsible for the market’s latest dislike for the US Dollar, after fueling the Greenback to the multi-day high.

That said, the inflation expectations, as per the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED) data, retreat from the weekly top while snapping a two-day winning streak at the latest.

It should be noted that the 5-year and 10-year inflation expectations per the aforementioned calculations drop to 2.26% and 2.35% at the latest, which in turn raises speculations of witnessing a sooner end to the hawkish monetary policy cycle at the Federal Reserve. The same will back the dovish Fed bias as the policymakers prepare speeches for the two-day-long annual Jackson Hole Symposium.

Also read: Forex Today: Global PMI disappoint as USD corrects lower

Apart from the likely weakness in the US inflation clues, the disappointing prints of the Purchasing Managers Index (PMI) for August and the US-China optimism also weigh on the US Dollar. Moving on, the US Durable Goods Orders, Chicago Fed National Activity Index, Kansas Fed Manufacturing Activity and weekly Jobless Claims will decorate the calendar.


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