Browsing: US Dollar Forecast

The Federal Reserve minutes from the January meeting indicated that the Fed does not plan to trim interest rates in the near future. Policymakers noted their concern with the coronavirus, stating that “the threat of the coronavirus, in addition to its human toll, had emerged as a new risk to the global growth outlook, which participants agreed warranted close watching.” This warning from the Fed underscores the threat that coronavirus poses to the global economy. There was some disappointing news on the manufacturing front, as manufacturing PMI came in at 50.8, which indicates stagnation in the manufacturing sector. This was shy of the estimate of 51.5 points.

  1. US CB Consumer Confidence: Tuesday, 1:00. The Consumer Board survey of 5 thousand households is showing strong consumer confidence in the U.S. economy. The December reading of 131.6 easily beat the forecast of 128. 2 points. The indicator is expected to improve to 132.6 in January.
  2. German Final GDP: Tuesday, 7:00. The final release for GDP is projected to confirm that the German economy was stagnant in Q4, as the initial GDP reading came in at 0.0%. The final figures do not usually deviate from the initial readings.
  3. US Durable Goods Orders: Thursday, 13:30. Durables Goods Orders has been showing strong swings of late. In December, the indicator climbed 2.4%, double the estimate of 1.2%. Analysts are braced for a decline of 1.4% in January.
  4. US Preliminary GDP: Thursday, 13:30. Preliminary (second estimate) GDP is expected to show a gain of 2.2% in the fourth quarter. This was slightly higher than the first estimate, which indicated that the U.S. economy grew by 2.1%.
  5. German Preliminary CPI: Friday, All Day. Inflation levels remain low in the eurozone’s largest economy, which is the bellwether for the entire eurozone. The final release for January came in at -0.6%, matching the forecast. The initial reading for February is expected to rebound to 0.3%.
  6. French Preliminary GDP: Friday, 7:45. The second-largest economy in the eurozone contracted by 0.1% in Q4, according to the initial GDP reading. The second estimate is expected to confirm this figure.
  7. Canadian GDP: Friday, 13:30. Canada’s GDP reports continue to hover around the zero level, pointing to weak economic growth. In November, the economy grew by 0.1%, above the forecast of 0.0%. The December estimate is unchanged at 0.1%.

*All times are GMT

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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

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