US dollar: will struggle to make much headway - Westpac

Analysts at Westpac explained that this week’s data calendar picks up the pace in respect to the dollar.

Key Quotes:

"durable goods orders, Conf. Board and Michigan confidence, Richmond and Chicago PMIs, plus the highlight May PCE inflation along with plenty of Fedspeak (including Yellen). May CPI inflation was indisputably soft at 0.1%, weakness broad based. The 3mth ann. core CPI is a paltry 0.0%, down from 3.0% in Feb. While Fed Chair Yellen won’t have any of it, seeing the weakness as transitory, markets are sceptical, pushing interest rates lower, and in turn the US dollar. 

3 months ahead: 

The USD will struggle to make much headway. Growth and inflation do not warrant a hawkish Fed, Republican consensus on tax cuts and infrastructure is still absent, and Russia-gate will slow the Republicans’ agenda and a debt ceiling showdown is on the horizon. By year end though, if these risks dissipate (admittedly a big if), the US dollar should resume the trend rise witnessed in 2016."