Created
: 2025.08.05
2025.08.05 18:35
US Dollar (USD) is hovering at the top-end of the range carved-out since Friday's post-NFP low. US stocks are powering forward and dragging global equity markets higher. **Expectations of looser Fed policy and resilient global economic activity are fueling the stock market rally**. This risk-on backdrop should act as a headwind for USD, especially against cyclical-sensitive currencies, BBH FX analysts report.
Risk-on sentiment and US data pressure USD outlook
"We see no strong dollar bias in today's US data release. The US merchandise trade deficit (8:30am New York, 1:30pm London) is seen narrowing to -$61.0bn vs. -$71.5bn in May reflecting a decline in imports. It's worth noting that goods imports collapsed -35.3% q/q in Q2, making trade the main contributor to GDP growth."
"The ISM Services index (10:00am New York, 3:00pm London) is expected to improve to a two-month high at 51.5 in July vs. 50.8 in June. Importantly, the Prices Paid subindex is seen easing 1 point to 66.5 in July but remain indicative of upside risk to inflation, complicating the Fed's path toward policy easing."
"We also get a fresh update of the Atlanta Fed GDPNow model later today. As of August 1, the model estimates Q3 annualized growth at 2.1%, down from 2.3% on July 31."
Created
: 2025.08.05
Last updated
: 2025.08.05
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