USD should trade cautiously - Westpac

Research Team at Westpac, suggests that leaning in favour of a small patch of USD weakness here despite recent market wobbles.

Key Quotes

“US CPI stats suffer from residual seasonality resulting in consistently softer H2 readings (Aug due 16 Sep), while subdued chainstore/auto sales flag a more mild Aug retail sales, all of which cements a steady Fed 21 Sep. The Fed will likely cut the dot-plot neutral rate too, altogether hardly a bullish USD story. A less than overtly dovish Draghi and a BoJ that will struggle to over-deliver adds to the impression that the USD should trade cautiously.”