USD Outlook: Housing Data, Powell & Treasury Yields in Focus This Week

USD Outlook: Focus Shifts to Housing Market, Tech Earnings, and Powell's Remarks

Limited US Data Keeps Dollar in Consolidation Mode

The upcoming week is expected to be relatively quiet on the US economic data front, leaving investors and traders to focus on secondary factors such as the housing market, tech sector earnings, and comments from Fed Chair Jerome Powell.

After last week's softer inflation data, markets remained largely unmoved in terms of Fed expectations. Traders are currently pricing in only 1–2 basis points for a July rate cut and about 16bps for September, reflecting a cautious stance toward immediate easing.

Dollar Index (DXY) Stays Range-Bound

The US Dollar Index (DXY) remains locked within a 97.70 to 98.95 range. While short-term Treasury yields dipped slightly on Friday following dovish remarks by Fed Governor Christopher Waller, ING analysts suggest the first rate cut might be postponed until December, barring any major downside surprises in data—especially the labor market.

Housing Sector Under the Microscope

This week, all eyes will be on the US housing market, a critical segment that may show signs of cooling. With 30-year mortgage rates hovering near 5.00%, there's rising concern that June existing and new home sales, due Wednesday and Thursday, might highlight demand weakness.

Treasury Auction and Powell's Influence

Adding to the mix is a $13 billion auction of 20-year Treasuries on Wednesday, which could offer insights into investor appetite amid sticky inflation and elevated rates. Meanwhile, Fed Chair Jerome Powell’s public remarks this week could guide rate expectations going forward—any hawkish tilt may bolster the USD slightly.