The US Dollar (USD) has spent most of August range trading between 97.50/75 and the upper 98 region in DXY terms and so it continues as month end approaches, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

USD range trade continues ahead of month end & key data releases

"Spot trading remains on the light side in turnover terms and the range of challenges facing investors is doing little to resolve the USD’s general consolidation at this point. On the session so far, the USD is tracking a little lower overall but losses are limited after yesterday’s abrupt slide amid focus on the Fed and the steepening US yield curve. Movement among the majors remains relatively limited."

"The AUD is a moderate outperformer despite disappointing Q2 capital expenditure data last night while the MXN, ZAR and GBP sit near the foot of the overnight performance league, registering the bare minimum in terms of gains on the USD. A raft of US data reports this morning may not move the market narrative along significantly. US Q2 GDP data may be revised slightly higher but recall that the first estimate of growth showed real final sales (reflecting total goods and services purchases of households and businesses) slid to the lowest since late 2022, suggesting some fragility in the growth picture."

"It may be that comments from Fed Governor Waller (voter, dovish dissenter) on monetary policy this evening (18ET) gives market participants reason enough to remain more or less sidelined for now. Technically, last Friday’s sell-off in the DXY remains the salient feature of the short-term (daily) chart and the outside range signal that developed around that move should mean that solid resistance for the index sits in the upper 98 region. Support for the index is 97.65."