Browsing: US Dollar Forecast

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

Rate decision in Australia and the Eurozone, Employment data from Canada and the US including the ADP report followed by the all-important NFP release. Join us as we explore the market movers for this week. 

US data remained upbeat with better than expected consumer sentiment, manufacturing and employment data, raising the odds for another hike in March. Consumer confidence in February exceeded forecast with 114.8 points showing improvement on all parameters including current conditions as well as expectations. Furthermore, US ISM Manufacturing PMI beat expectations with a 57.7 reading, as manufacturers were more optimistic about future growth under Trump’s new policies. The week continued with strong employment data with a 19,000 decline in the number of weekly Jobless claims projecting the US labor market is nearing full employment. Will this trend continue in the coming weeks? Let’s start,

Updates:
  1. Australian rate decision: Tuesday, 3:30. The Reserve Bank kept the official cash rate unchanged at 1.5% at their February meeting. The reading was in line with market forecast. Some economists believe the RBA’s next move will be to raise rates while others say there is still room for more rate cuts due to relatively low inflation. The RBA monitors the recent increase in lending to property investors and further data about the economy’s performance to determine its next move.
  2. US ADP Non-Farm Employment Change: Wednesday, 13:15. US employers increased the pace of hiring in January, adding the highest number of jobs since June. ADP reported a job growth of 246,000 jobs, in January compared to 151,000 in December. The figures indicate that job gains have accelerated after a lukewarm period in the second half of 2016. The low unemployment rate forces employers to increase pay to attract workers, which could raise household income.
  3. US Crude Oil Inventories: Wednesday, 15:30. U.S. crude oil stocks increased in the week to Feb. 24 despite higher output from refineries and a decline in gasoline inventories. Crude stocks grew 1.5 million, in line with analysts’ forecast. U.S. crude imports increased by 793,000 bpd while exports fell sharply to 721,000 bpd, compared with 1.21 million the previous week.
  4. Eurozone rate decision: Thursday, 12:45. The European Central Bank maintained its benchmark interest rate in January, in line with market forecast. The ECB has also decided to leave the bond-buying stimulus scheme unchanged. The head of the central bank Mario Draghi said the Eurozone economy is stronger, but still fragile and requires more time to rebound. Therefore monetary stimulus may still be raised if required. The downside risks are sluggish growth, subdued inflation pressures and worries about the Italian banking crisis.
  5. US Unemployment Claims: Thursday, 13:30. The number jobless claims declined by 19,000 to 223,000 in the week ended Feb. The reading was neared a 44-year-low, indicating the job market continued to improve maintaining the momentum in the first quarter. Following the positive condition in the labor market together with rising inflation will push the Federal Reserve to raise interest rates this month. This was the 104th straight week that claims remained below 300,000, the longest stretch since 1970, when the labor market was much smaller, indicating it is now at or close to full employment, with an unemployment rate of 4.8%.
  6. Canadian employment data: Friday, 13:30. Canada expanded its job creation in January contrary to expectations for employment contraction. The employment market gained 48,000 jobs mainly in the service sector. Furthermore, the unemployment rate inched down to 6.8% from 6.9% in December, signaling economic recovery after two years of hardships induced by the collapse in oil prices. Nevertheless, two-thirds of jobs created were part-time. Part-time employees in 2016 has jumped by 190,000, while full-time work has increased by 86,000 jobs, pushing the share of part-time employees to 19.6% from 18.8% a year earlier.
  7. US Non-Farm Employment Change and Unemployment rate: Friday, 13:30. US employment market expanded by 227,000 in January while the unemployment rate increased to 4.8%. Economists expected an increase of 170,000 jobs, and the unemployment rate to remain at 4.7%. Wage growth, however, stayed lukewarm with average hourly earnings up just 3 cents and 2.5% percent on an annualized basis. The lack of wage growth indicates there is still room for tightening in the labor market.

That’s it for the major events this week. Stay tuned for coverage on specific currencies

*All times are GMT.

Our latest podcast is titled March hike, Macron, and Mario Draghi

Follow us on Sticher or iTunes

Further reading:

Get the 5 most predictable currency pairs
1 2 3 4 5 34