US Dollar Forecast: Major events moving currencies

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US dollar forecast: Forex events that will rock currencies ► focusing on major events and especially on publications in the US, moving the US dollar (greenback). Here is some general information. Scroll down for the latest US dollar outlook

USD and forex general characteristics

The United States Dollar is the reserve currency of the world. The dollar is the currency of choice for oil prices as well as other commodities. Foreign exchange pairs are divided into majors, minors, and crosses. Both majors and minors include the USD.

US events influence currencies more than any other event. The decisions and statements of Federal Reserve officials and economic developments in the US make the biggest waves. The US economy is the biggest in the world.

The outlook consists of mostly US economic events but also key market-moving figures from other major economies. The euro-zone, the UK, and Japan stand out.

Recent USD Moves

The US dollar enjoyed a strong rally following the election of Donald Trump. The Federal Reserve had already begun raising rates on the background of an improving economy. The fiscal stimulus that the new President promised supported the greenback. The upwards move was compounded by an upbeat outlook by Fed Chair Yellen.

However, the winds have changed in 2017. A “Donald Disappointment“, especially as seen in the health-care debacle, hurt the dollar. In addition, the Fed remains cautious after the “dovish hike“.

Trump’s scandals have reached a boiling point where an impeachment is possible. See how to trade an impeachment with the USD. The US economy is not looking good, with poor growth in Q1 2017.

Latest weekly US Dollar forecast

By Yohay Elam on Jun 16, 2017

The US dollar enjoyed some strength thanks to the Fed’s hawkish hike. Can it continue advancing? The Fed can continue influencing currencies thanks to speeches from top Fed officials. In addition, we have housing data from the US and other events. Here are the highlights for the upcoming week.

The Fed raised interest rates despite weak inflation data. Moreover, Yellen dismissed the current slump in inflation as related to one-off factors. In addition, they left the dot=plot unchanged, implying another hike later this year and expressed confidence in growth. The dollar managed to overcome the revelation that Trump is being investigated for an alleged obstruction of justice. Elsewhere, the pound stabilized thanks to three votes for a rate hike, Australia enjoyed an excellent jobs report and the Canadian dollar jumped on a hawkish shift from the BOC.

Updates:

Jun 22, 8:59: Is USD/JPY ready to fall? 3 fundamental reason and a downtrend channel: USD/JPY is trading in the middle between the cycle high of 114.30 and the cycle low of 108.10. Will it...
Jun 21, 16:01: US existing home sales slightly beat with 5.62 million – USD/JPY ticks up: Sales of existing homes climbed by 1.1% against an expected fall. They rose from a marginally downwards revised 5.56 million...
Jun 21, 9:36: On fundamentals, technicals and more – interview with Dale Pinkert: I had the privilege to be interviewed by Dale Pinkert of F A C E. We talked about major currencies,...
Jun 21, 9:04: USD: Strength To Prove Temporary; What’s The Trade? – Danske: The US dollar enjoys the strength enthused by the hawkish hike. What’s next? Here is their view, courtesy of eFXnews:...
Jun 19, 12:42: Fed faking it until they make it? + a Brexit brawl – MM #148: The Fed not only raised rated but put on very rosy glasses. We poke holes into the “off one” factors...
Jun 19, 8:50: USD Index: After A Bounce, A Deeper Wave ‘C’ Could Extend This Summer – BofAML: The US dollar had a mostly positive week last week, but against some currencies, it is still struggling. What about...

FOMC’s Dudley talks: Monday, 12:00. New York Fed President Bill Dudley is No. 3 at the Federal Reserve and usually a dove. In his speech in Plattsburgh, Dudley could provide more insight about the next moves of the Fed. Markets care mostly about interest rates and if Dudley surprises with hawkishness, markets will react.
FOMC’s Fischer talks: Tuesday, 12:00. Stanley Fischer is the Vice Chair of the Fed and contrary to Dudley, he is considered a hawk. Fischer will be speaking across the pond, in Amsterdam. Fischer will have a bigger impact if he goes dovish.
US Existing Home Sales: Wednesday, 14:00. Most home sales are of existing, second-hand homes. Back in April, the annualized level of sales stood at 5.57 million. A similar level is on the cards now: 5.54 million.
Crude oil inventories: Wednesday, 14:30. The weekly update on the level of inventories always moves oil prices but also has a wider impact. The recent rises in inventories pushed oil prices lower and this goes hand in hand with the stronger dollar. The correlation is strengthening. Inventories dropped by 1.7 million last week.
New Zealand rate decision: Wednesday, 21:00. The Reserve Bank of New Zealand maintained the interest rate at 1.75% in the past few meetings, since lowering it in November 2016. In general, the New Zealand economy is doing well and this is reflected in the recent rise of the kiwi. However, the most recent GDP report fell short of expectations, with a gain of only 0.5% q/q. The team led by Governor Graeme Wheeler is likely to leave the interest rate unchanged at 1.75% and the statement will make a difference. They usually try to talk the currency down.
US jobless claims: Thursday, 12:30. This weekly barometer of the US jobs markets looks very stable and going in the right direction. A drop to 237K was seen recently. A similar number is on the cards: 241K is predicted. Contrary to previous releases, this time the publication stands on its own.
US new home sales: Friday, 14:00. While most sales are of existing homes, the sales of new homes triggers wider economic activity around them. New home sales stood at 569K in April and a rise to 599K is forecast now.