US Dollar: Dovish Fed repricing risk grows – BBH

Brown Brothers Harriman’s (BBH) Elias Haddad notes the US Dollar (USD) is mixed near a one‑week high as major FX pairs test key technical levels, including EUR/USD at its 200‑day moving average and USD/JPY near 160.00. Haddad highlights divergent Fed commentary around Jackson Hole but aligns with Susan Collins’ view that policy is mildly restrictive, leaving the Dollar exposed to a dovish repricing of Fed rate expectations.

Dollar mixed as Fed views diverge

"USD is mixed near a one-week high, while stocks and bond yields are mostly firmer. Major FX pairs are pressing key technical levels that could trigger sharper moves if broken."

"We share Collins’s view, leaving USD vulnerable to a dovish repricing. Fed funds futures currently price in 35% odds of a 25bps hike to 3.75-4.00% at the next September 16 meeting and a total of nearly 50bps of tightening over the next twelve months."

"The BLS preliminary annual payroll benchmark revision is due today (3:00pm London, 10:00am New York). An 185k upward adjustment is expected, suggesting payroll growth was understated by roughly 15k per month in the twelve months to March 2026."

"The backward-looking revision won’t shift the dial on Fed rate expectations. But a downgrade could add to soft hiring concerns."

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