The US dollar retreats amid declining expectations

The US dollar is retreating this week after six straight weeks of gains. This was supported by a series of publications from the US, which one after the other were worse than expected, reducing the chances of a November interest rate increase.

The US dollar index contract retreated from the highest level since the end of May, i.e. from the potential resistance set by the local peak. Currently, however, even though the dollar has retreated, it may be at a series of potential supports. It seems that a stronger decline in the USD rate could occur only after the index drops even 1,2% lower. What would it look like if the dollar index was translated into the zloty exchange rate?

The dollar exchange rate against the zloty recently tested PLN 4,15, which was the highest level since the beginning of July and close to the levels from mid-June. From the point of view of the scale of the recent correction of the dollar, we can compare it to the movement we observed in January and February. Then the dollar exchange rate increased by 23 groszy in relation to PLN. Meanwhile, the current increase amounted to 22 groszy. In theory, therefore, a test of the area of ​​4,16-4,17 is still possible to reach a more significant point of potential resistance for the USD/PLN exchange rate.

What could influence the dollar quotations soon?

Primarily data from the United States. Below is a list of the publications we are waiting for today. Expectations regarding the release of economic data in the US:

American Spending Report (July)

• Americans' spending (m/m): Americans' spending is expected to increase 0,6% in July compared to the previous month. The previous reading was 0,5%.
• PCE core (m/m): The personal spending price core index is forecast to increase by 0,2% in July, remaining in line with the previous reading.
• PCE (m/m): The personal expenditure price index is expected to increase by 0,2% in July, in line with the previous reading.
• PCE core (y/y): The personal spending price core index is expected to grow year-on-year at 4,2%, up slightly from the previous reading of 4,1%.
• PCE (y/y): The year-on-year personal spending price index is expected to rise 3,3% in July, a slight increase from the previous reading of 3%.

Americans' Incomes (July)

• Americans' income (m/m): Americans' incomes are forecast to increase by 0,3% in July compared to the previous month. This expectation remains at the same level as the previous reading.
• In the context of recent weaker publications JOLTS, and also before NFP, today publications regarding weekly applications for unemployment benefits may also attract attention.
• Applications for unemployment benefits: The number of applications for unemployment benefits is expected to reach 235. This represents a projected increase from the previous result of 230.

The publications will be announced at 14:30 p.m., while at 8:30 a.m. the dollar was worth 4,09 and the euro rate was PLN 4,46.