The US composite PMI declined by 1.6 points to 50.4 in August. While it remains higher than in the Eurozone and the UK, it is more consistent with weaker growth.

We still expect the Fed to leave rates on hold at the September FOMC meeting encouraged by slowing inflation even as the US economy has shown more resilience recently. 

The US Dollar should continue to derive more support in near term from more evidence of economic weakness outside of the US in China and Europe, and from the recent yield spread movements in favour of the US.