US Dollar Index skids to near 104.00 on lower forecasts of the US Durable Goods Orders

• The DXY has started the week on a weak note ahead of the downbeat US economic data.
• Weak US economic data may restrict the fed to sound hawkish extremely.
• Fed policymaker Mary Daly has supported on more 75 bps rate hike for July.

The US dollar index (DXY) is declining firmly in the Asian session as investors are dumping the asset on expectations of a poor performance from the US economic data. The DXY has slipped to near 104.00 after a sheer downside move right from the initial tick of the trading session and is expected to drop further after an establishment below the same.

Lower estimates for the US Durable Goods Orders

Last week’s underperformance from the US Purchase Managers Index (PMI) is expected to be carry-forwarded to the US Durable Goods Orders data. A preliminary estimate for the economic data is 0.1% vs. the former figure of 0.5%.  It won’t be wrong to state that mounting price pressures and Federal Reserve (Fed)’s inability to bring even a minute impact on the former have started affecting the overall demand structure. This will leave less room for the Fed to tighten its policy rates further.

Fed’s Daly support one more 75 bps rate hike

San Francisco Fed President Mary Daly is supporting one more 75 basis points (bps) rate hike by the Fed in its July monetary policy meeting. Considering the soaring price pressures, the Fed needs to display some quick responses and follow a consecutive bumper rate hike announcement. The inflation rate has reached to a four-decade high of 8.6% on an annual basis.

Key data this week: Durable Goods Orders, Pending Home Sales, Consumer Confidence, Gross Domestic Product (GDP), Core Personal Consumer Expenditure (PCE), ISM Manufacturing PMI.

Major events this week:  European Central Bank (ECB) Lagarde speech, Fed chair Jerome Powell’s speech, OPEC meeting.