Will the US Dollar’s Rebound Hold Ahead of Next Fed’s Decision?

The US Dollar (USD) has rebounded, ending a three-week decline, with the US Dollar Index (DXY) recovering from yearly lows near 98.00. As markets await the Federal Reserve’s September 17 meeting, a packed economic calendar could shape the USD’s path. With US markets closed for Labor Day on September 1, key data releases begin September 2 with ISM Manufacturing, S&P Global Manufacturing PMI, Construction Spending, and RCM/TIPP Economic Optimism Index. On September 3, expect JOLTs Job Openings, Factory Orders, Fed Beige Book, and API crude oil inventory. September 4 brings Initial Jobless Claims, ADP Employment Change, ISM Services PMI, and EIA crude oil stockpiles. The week peaks on September 5 with Nonfarm Payrolls and Unemployment Rate, critical for Fed rate cut expectations.

Euro Under Pressure but Recovers

EUR/USD faced selling pressure but rebounded from below 1.1600. The eurozone’s data starts September 1 with Germany and eurozone HCOB Manufacturing PMI and Unemployment Rate, followed by the flash Inflation Rate on September 2. On September 3, HCOB Services PMI and Producer Prices are released, with Construction PMI and Retail Sales on September 4. The week ends on September 5 with Germany’s Factory Orders, revised Q2 GDP, and Employment Change.

Pound Faces Continued Weakness

GBP/USD logged a second week of losses, stalling near 1.3550. The UK’s calendar opens September 1 with Nationwide Housing Prices, Mortgage Approvals, S&P Global Manufacturing PMI, and BoE data. Services PMI follows on September 3, Construction PMI and BoE’s Decision Maker Panel on September 4, and Retail Sales and Halifax House Price Index on September 5.

Yen Stays Volatile

USD/JPY hovered near 147.00 with modest gains. Japan’s data includes Capital Spending and Manufacturing PMI on September 1, Services PMI on September 3, Foreign Bond Investment on September 4, and Household Spending, Average Cash Earnings, and economic indexes on September 5.

Aussie Dollar Gains Momentum

AUD/USD broke above 0.6500, showing bullish strength. Australia’s week starts September 1 with Manufacturing PMI, Building Permits, Private House Approvals, Business Inventories, and Commodity Prices. Q2 Current Account is due September 2, followed by Industry Index, Services PMI, and Q2 GDP on September 3. Balance of Trade and Household Spending wrap up on September 5.

Central Bank Speeches and Meetings

Key central bank speeches include ECB’s Schnabel, Cipollone, and Lagarde on September 1; BoJ’s Himino and ECB’s Elderson and Machado on September 2; Fed’s Kashkari, ECB’s Lagarde, and BoE’s Mann and Breeden on September 3; Fed’s Williams and ECB’s Cipollone on September 4; and Fed’s Goolsbee on September 5. The National Bank of Poland (NBP) meets September 3 (5.00% actual vs. 4.75% expected), and Bank Negara Malaysia (BNM) on September 4 (2.75% actual vs. 2.75% expected). With this data deluge, markets are focused on whether the USD’s recovery will hold or face global pressures.