TD Securities expects limited dollar weakness unless US economic data deteriorates significantly in coming weeks.
The US Dollar Index fell 0.3% following the Federal Reserve’s July rate hold and Chair Warsh’s press conference, which lacked hawkish guidance. The move aligned with TD Securities’ base-case expectations, though dissents were slightly higher than anticipated.
Market reaction reflected disappointment over Warsh’s perceived lack of clarity, extending the dollar’s decline post-statement. However, strategists view the selloff as temporary, citing hawkish dissents that signal broader Fed committee support for current policy.
TD Securities forecasts limited downside for the USD unless upcoming US economic data surprises to the downside. Without such a shift, the firm expects the dollar to stabilize in the near term.