OCBC analysts see modest USD upside on stable US labor data and hawkish Fed risks, despite low expectations for Sintra policy shifts.
Federal Reserve Chair Kevin Warsh’s appearance at the Sintra forum and upcoming US payrolls data are key drivers for the US Dollar (USD) this week. Analysts highlight low odds of new policy guidance but maintain a modestly bullish bias due to hawkish Fed risks and stabilizing labor market conditions.
The May JOLTS report indicated US labor conditions have steadied after earlier softening. Meanwhile, softer eurozone inflation reduces pressure on the European Central Bank (ECB) to tighten further in the near term, supporting the USD’s relative strength.
Warsh’s remarks on oil prices and labor market trends will be closely watched, though expectations for fresh policy signals remain muted following June’s FOMC press conference. ECB officials have signaled no urgency for a July hike if energy markets stay stable.