Fundamental Forecast for Dollar:Neutral
- Following a clear ambiguity over a December Fed hike, a range of central bankers are set to speak – including Janet Yellen
- October NFPs will represent top event risk, but payrolls and unemployment aren’t as important as the wage component
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The Dollar was once again offered the opportunity to make a run on 2015’s highs and move on to levels not seen since 2003. And once more it would fall short of the task. Thefundamental winds to the currency’s back are strong, but they are also well-encorporated. The relative fundamental appeal of the Greenback has carried EURUSD to 1.05, USDJPY to 126 and USDCNH to 6.60. An extension of this already-impressive run would require a serious escalation in conviction. But, what short of a realized Fed hike or financial plunge forcing investors to scramble for safety could measure up to the technical implications of a breakaway climb into 12-year highs? There is plenty on tap this week which will give it a go, but questions of scale will constantly plague bulls’ confidence.