Dollar Index: Rangebound Ahead of PCE Data – BBH

The dollar index is trading around 99.03, with market sentiment cautious ahead of the U.S. PCE inflation data, keeping the currency pair in a tight range. Analysts at Brown Brothers Harriman (BBH) note that the dollar remains firm, finding support above recent lows following the U.S. Treasury's announcement of buyback measures.

**Mixed Factors Cap Movement**

BBH's Elias Haddad expects the dollar index to stay confined within a 96.00–100.00 range over the coming months. This outlook reflects a tug-of-war between the relative strength of the U.S. economy, which supports the dollar, and expectations of a potential Federal Reserve pivot toward dovish policy, along with concerns over U.S. fiscal credibility, which could limit upside.

**Focus on PCE Data and Jackson Hole**

Near-term attention centers on the upcoming U.S. July Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation gauge, which will offer key clues for future policy direction. Additionally, Fed Chair Kevin Warsh's speech at the Jackson Hole symposium on Friday is highly anticipated, with markets looking for signals on the monetary policy path and recent Treasury yield trends. Reports indicate that the Treasury's buyback operations, including plans to double the size of quarterly long-dated debt repurchases, briefly pushed yields lower, though they remain elevated overall, capping the dollar's rebound momentum.