FXStreet notes that a more challenging narrative for the USD has been developing lately. However, economists at Westpac suggest that the US Dollar Index (DXY) downside is likely limited to 91.5-92.0. 

“Chair Powell delivered a cautious Jackson Hole tapering message, confidence surveys show the Delta strain is sapping US rebound momentum, while the hawkish ECB wing has been talking up tapering prospects ahead of their 9 Sep meeting. DXY is unlikely to sustain any significant damage beyond 91.50-92.0 support though.”

“Fed Governor Waller and Presidents Bullard, Rosengren and Kaplan have openly called for a September taper announcement but the ‘inner circle’ of Brainard, Clarida and Powell are not likely on board yet.” 

“Another strong payrolls in the 750K-1M range for August would restore faith in rebound momentum and breathe fresh life into September FOMC taper announcement bets. That would likely stabilise DXY.”