The Dollar Index (DXY) was barely changed at 104.07 before today’s FOMC meeting, DBS FX analyst Philip Wee notes.

The anticipation is almost killing

“During the overnight session, the DXY briefly hit 104.80, near the level it fell on July 11 due to the softer US CPI inflation.” 

“The Federal Reserve (Fed) should leave the door ajar to lower interest rates without endorsing the futures market’s aggressive bet (110% probability) on a September cut until it sees the US unemployment rate data on August 2 and the CPI inflation data on August 14.”

“Suppose the Fed gains more confidence about inflation resuming its decline towards its 2% target or worries more about rising joblessness, it will likely provide the timing guidance at the Kansas City Fed’s Jackson Hole Symposium on August 24-26.”