US Dollar: Data weakness keeps downside risks elevated - TD Securities

FXStreet Insights Team FXStreet

TD Securities strategists argue that the US Dollar (USD) has re-entered a bearish regime after the Treasury buyback announcement pushed the US Dollar Index (DXY) below its 200‑day SMA. They highlight weaker US data, rising US institutional credibility and financial repression risks, and Jackson Hole communication risks as factors that could keep USD under pressure over the coming weeks.

Dollar momentum turns decisively lower

"The bearish USD regime returns. The USD was one breath away from its bearish turn after benign US data releases in July; Treasury buyback announcement on Aug 19 cemented the prevailing bearish momentum."

"On top of recent US data weakness and gradual pricing out of Fed rate hike expectation, increased financial repression and US institutional credibility risks further cemented the bearish USD momentum."

"Recent US data releases have unwound all the upside surprises from Q2. US data also underperforms vs RoW now. Near-term Fed rate hike market expectations have more room to get priced out unless US data turns stronger again."

"USD positioning has just flipped from long to short and has more room to grow. Broad USD downtrends remain intact except in select pairs such as USD/CAD. Front-end risk reversals broadly flipping toward USD puts vs G10 currencies amid rising implied vols suggest investors are chasing the USD lower."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD bounces back toward 0.6950 on fresh USD supply

AUD/USD bounces back toward 0.6950 in the Asian session on Friday. The US Dollar retreats from 17-month highs as traders take profits off the table ahead of the all-important US Nonfarm Payrolls report. Meanwhile, the Australian Dollar draws support from reviving expectations of a November interest rate hike amid elevated global yields and inflation risks.

USD/JPY struggles near 158.00 as USD retreats ahead of NFP

USD/JPY is struggling for fresh impetus near 158.00, moving away from the top end of its weekly range in the Asian session on Friday, after hotter-than-expected Tokyo CPI and amid a broad US Dollar retreat. Traders reposition themselves ahead of US Nonfarm Payrolls.

Gold surpasses $4,200 on US Payrolls

Gold trades with decent gains at the end of the week, clearing the key $4,200 mark per troy ounce. The precious metal’s positive price action comes amid some decent decline in the US Dollar as investors assess the latest NFP data.

Crypto Today: Bitcoin, Ethereum and XRP gains reinforce bullish outlook

Cryptocurrency prices are broadly recovering on Friday, led by Bitcoin moving above $86,000. Ethereum has reaffirmed its bullish outlook, rising above $2,700 while the immediate area at $2,800 caps upside. Meanwhile, Ripple hovers near $1.54.

Week ahead – Fed minutes in the spotlight amid bond market rout

Energy crisis and soaring bond yields to stay in driver’s seat in quiet week. Fed minutes eyed after drop in October rate hike bets. ISM services PMI and Treasury auctions to be watched too. Canadian employment, Japanese wages and ECB minutes also on tap.

The Euro is near a one-year low: Inflation could trigger its rebound, not its fall

EUR/USD has fallen to its lowest level since May 2025. The pair hit 1.1312 on Wednesday and trades well below the January peak of 1.2082. The decline reflects a powerful combination of US Dollar strength, geopolitical uncertainty and renewed concerns about Europe's exposure to higher energy prices.