Browsing: US Dollar Forecast

Markets are still digesting the all-important speech by Fed Chair Jerome Powell that rocked the dollar. What’s next? US durable goods orders and an update on GDP are in the spotlight as August draws to an end. Here the highlights for the next week.

  1. US Durable Goods Orders: Monday, 12:30. Orders of durable products represent investment – which the Fed watches closely. The data also feeds into GDP calculations. Back in June, orders rose by 2%, beating expectations. Core orders – which are no less important – advanced by 1.2%. Moderate drops cannot be ruled out in July, the first month of the third quarter.
  2. US CB Consumer Confidence: Tuesday, 14:00. The Conference Board’s monthly survey of consumers has rebounded in July, scoring 135.7 points. The upbeat figure may be followed by a weaker one in June. The University of Michigan’s parallel measure missed estimates in the preliminary publication for August.
  3. US GDP (second release): Thursday, 12:30. The US economy has outperformed its peers in the second quarter by growing at an annualized rate of 2.1% according to the initial release. This expansion stands out against contraction in Germany and in the UK. The second release will likely confirm the upbeat level, and any deviation will impact the Fed.
  4. Euro-zone CPI: Friday, 9:00. The Consumer Price Index is going nowhere fast in the old continent. Subdued levels of inflation are behind the European Central Bank’s desire to reduce interest rates. Headline CPI rose by 1.1% in July and will likely remain around these levels in the preliminary read for August. Core CPI disappointed with 0.9% last month and a repeat of a sub-1% figure may weigh on the euro.
  5. US Core PCE: Friday, 12:30. The Personal Consumption Expenditures is the Fed’s preferred measure of inflation and uses a different formula than the Consumer Price Index report (released earlier). After Core CPI surprised with 2.2% year on year in July, we may see Core PCE accelerating from 1.6% to 1.7%. The monthly figure has risen by 0.2% in the past three months.
  6. Canadian GDP: Friday, 12:30. Canada publishes its GDP figures on a monthly basis but the upcoming release for June concludes the second quarter and has greater importance than usual. The Canadian economy has outperformed some of its peers in recent months. Can this continue? After experiencing a 0.2% expansion in May, a more moderate growth rate may be seen in June.

*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