Browsing: US Dollar Forecast

After the Fed provided some hints toward the next rate decision and trade talks rocked markets, the focus shifts to the Brexit crunch time and critical consumer data from the US. Here the highlights for the upcoming week.

  1. German ZEW Economic Sentiment: Tuesday, 9:00. This forward-looking survey of around 300 analysts and investors is released early in the month and is watched by policymakers. After several months of rapid deterioration, Economic Sentiment surprised in September with a jump to -22.5 points. However, the negative number represents pessimism. A similar score is likely for October.
  2. UK inflation: Wednesday, 8:30. The Bank of England has seen the headline Consumer Price Index hover around the bank’s target of 2% in the past few months. However, annual inflation slipped to 1.7% in August. Governor Mark Carney and his colleagues may reconsider their intention to raise rates – based on assumptions for a smooth Brexit – if CPI continues falling.
  3. US retail sales: Wednesday, 12:30. The US economy is centered around consumption which holds up the economy while investment and manufacturing are struggling. Back in August, headline sales rose by 0.4% core sales remained flat, and the all-important control group increased by 0.3%. Any signs of fatigue from the consumer – as expressed in some consumer sentiment surveys – may weigh on the dollar.
  4. Australian employment: Thursday, 00:30. Australia enjoyed several months of substantial gains in job creation. Employment Change stood at 34.7K back in August and a more moderate increase is likely in the figures due out for September. The Unemployment Rate stood at 5.3% and a similar level is likely now.
  5. EU Summit on Brexit: Thursday, Friday. Leaders of the European Union convene for a regular summit, but the topic that dominates the agenda is extraordinary – sorting out Brexit just two weeks ahead of the deadline. Will Boris Johnson find common ground with his counterparts? And if he does compromise with them, will he continue receiving support from the hardliners in his party? A solution to the question of Northern Ireland’s status remains critical. Apart from reaching a deal, the other options are extending Brexit once again – as the Benn Act requires, or leaving without an accord.
  6. Chinese GDP: Friday, 4:00. The world’s second-largest economy publishes its Gross Domestic Product figures less than three weeks after the quarter ends. While many doubt the accuracy of the figures, they move markets. Chinese growth has slowed down to 6.2% yearly, in line with the government’s projections. A drop below 6% would cause jitters all over the world.

*All times are GMT

Follow us on Sticher or iTunes

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 5 47