Browsing: US Dollar Forecast

US nonfarm payrolls posted a paltry gain, pointing to a slow recovery for the world’s largest economy. With the resurgence in Covid-19, economic conditions across the major economies are difficult. This week’s focus is on inflation in the US and Germany, and GDP in the UK.

Eurozone inflation was unexpectedly strong in January. Headline inflation rose to 0.9% while core CPI improved to 1.4%. German Factory Orders fell by 1.9%, its first decline in eight months.

Strong UK employment numbers gave sterling a slight boost early last week. Wage growth jumped to 3.6%, up sharply from 2.7%. Unemployment rolls rose by just 7 thousand, well below the estimate of 47.5 thousand. The unemployment rate nudged up from 4.9% to 5.0%, its highest level since March 2016.

The Bank of England maintained interest rate and QE levels at its policy meeting. BoE Governor Bailey assured the markets that the BoE was not signaling that it planned to introduce negative interest rates, although the BoE did tell banks to be prepared for such a scenario.

U.S. Nonfarm Payrolls disappointed with a negligible gain of 49 thousand, which didn’t even reach the forecast of 85 thousand. Wage growth rose 0.2%, down from 0.8% beforehand. There was better news from the unemployment rate, which dropped from 6.7% to 6.3%, its lowest level since March.

In Canada, January’s employment numbers were dismal. The economy shed some 212.8 thousand jobs, a second straight decline and much weaker than the estimate of -43.5 thousand. The unemployment rate jumped from 8.6% to 9.4%, its highest level in five months. This missed the forecast of 8.9%.

U.S. Nonfarm Payrolls disappointed with a negligible gain of 49 thousand, which didn’t even reach the forecast of 85 thousand. Wage growth rose 0.2%, down from 0.8% beforehand. There was better news from the unemployment rate, which dropped from 6.7% to 6.3%, its lowest level since March.

  1. German Final CPI: Wednesday, 7:00. Inflation has struggled but improved in December with a solid gain of 0.5%. The upward trend is expected to continue, with a street consensus of 0.8%.
  2. US CPI: Wednesday, 13:30. The financial markets are paying closer attention to inflation, which is showing signs of resurgence. Headline inflation rose to 0.4% in December and an identical gain is expected for January.
  3. UK Prelim GDP: Friday, 7:00. After the huge swings in GFP in the past two quarters, GDP is expected to show a negligible gain of 0.5%. An unexpected reading could affect the movement of GBP/USD.

Further reading:

Safe trading!

Get the 5 most predictable currency pairs


US dollar forecast: Preview for the main foreign exchange events that will rock currencies ► focusing on major events and especially on publications in the USA, moving the US dollar (greenback). Here are some general data. Scroll down for the latest US dollar outlook

USD and forex general characteristics

The United States Dollar is the reserve currency of the world, partly due to its use in settling oil prices and other commodities. Foreign exchange pairs are divided into majors, minors, and crosses. Both majors and minors include the USD.

US economic indicators and political developments influence currencies more than anywhere else in the world. The decisions and statements by Federal Reserve officials make the biggest waves. The US economy is by far the largest in the world. US politics and policy also have an outsized impact on currencies.

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 greenback suffered a bad start to the year: poor growth and scandals hurt the US dollar. Hopes for fiscal stimulus faded with the repeated failures to repeal Obamacare. Despite two rate hikes in the first half, the dollar struggled. Other economies outperformed America.

The second half already looks a lot different: economic growth reached 3% annualized and the Fed seems to stick to its plan to hike rates three times. In addition, Trump’s tax plan inspires markets, despite hurdles to pass it before Christmas.

Headwinds come from the political scandals. Low inflation also weighs on the dollar. If the “mystery” persists and wages do not accelerate, Janet Yellen and co. could refrain from further tightening. The new Fed Chair Jerome Powell will take office in February 2018, and he may not stick to the current plan of raising rates three times.

Latest weekly US Dollar forecast

1 2 3 4 53