The Federal Reserve (Fed) is on a hiatus for the time being, as the blackout period ahead of next week's FOMC meeting has begun. Nevertheless, there still could see some movement in the US Dollar (USD) before the weekend, Commerzbank FX strategist Antje Praefcke notes.

USD can rise a little further

“After the last inflation figures for June, which surprised to the downside, the market once again reinforced its rate cut expectations for the Fed. A first move in September is now almost fully priced in, and the market also sees a good chance of two more cuts before the end of the year. September would be the better occasion for a first rate cut, as it could back them up with the corresponding forecasts.”

“The growth figures for the second quarter tomorrow are an indication of how resilient the US economy continues to be. The second quarter should be even better than the first. The PCE index, the Fed's preferred measure of inflation, will be published on Friday. However, thanks to the inflation figures already published for, this contains little new information.