US Dollar recovers slightly, bouncing off 2024 lows

LONDON (August 21) The US Dollar (USD) is catching up again, trading in slightly positive territory on Wednesday, after three consecutive sessions of sharp drops. The bounce appears to be a pure technical one after the US Dollar Index (DXY) hit 101.30 in early Asian trading, the low for 2024. 

On the economic data front, the Federal Open Market Committee (FOMC) Meeting Minutes for July will be published, although these are not expected to move the needle ahead of Jackson Hole on Friday. Besides the FOMC Minutes, the Nonfarm Payrolls Benchmark revision could become interesting. Markets were rattled by the latest US Nonfarm Payrolls number on the first Friday of August, a data point that triggered the unwinding of the carry trade which had spillover effects in equities and caused recession concerns for the US economy. Although the revisions are not going to cover August, any big change on earlier numbers might still bear some importance. 

Daily digest market movers: Vacuum until Friday

• At 14:00 GMT, the Nonfarm Payrolls Benchmark revision is due to come out. The revisions will cover 12 months up to March of this year. 
• The US Treasury is set to allocate a 20-year Bond at 17:00 GMT.
• At 18:00 GMT, the Fed will release its Minutes from July’s meeting.
• Asian equity markets are facing a bit of pressure and are in the red, which helps the US Dollar strengthen a touch. European and US equities are on the rise. 
• The CME Fedwatch Tool shows a 69.5% chance of a 25 basis points (bps) interest rate cut by the Fed in September against a 30.5% chance for a 50 bps cut.  Another 25 bps cut (if September is a 25 bps cut) is expected in November by 50.9%, while there is a 40.9% chance that rates will be 75 bps below the current levels and an 8.2% probability of rates being 100 basis points lower. 
• The US 10-year benchmark rate trades at 3.81%, printing a fresh low for the week.

FXStreet