Brown Brothers Harriman’s (BBH) Elias Haddad notes that the US Dollar (USD) has given back part of its post-NFP gains, but still benefits from robust US economic activity, a firm labor market and sticky inflation that underpin the Federal Reserve’s (Fed) hawkish bias. Upcoming US October CPI and PPI releases are highlighted as key drivers for Fed funds rate expectations into the December policy meeting.

Fed data focus supports Dollar

“USD pared back some of Friday’s strong October non-farm payrolls gains. Going forward, robust US economic activity, favorable labor market conditions and sticky underlying inflation back the Fed’s hawkish bias, keeping rate differentials supportive of USD”

“The October New York Fed consumer survey is today’s data highlight (4:00pm London, 11:00am New York). But this week’s US October CPI (Tuesday) and PPI (Friday) prints will be the main drivers of Fed funds rate expectations. Fed funds futures imply 80% odds of a 25bps hike at the next December 9 policy decision.”

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)