Morning Preview: Dollar Loses its Lustre
Rowan Crosby • 1 min read
Once again Donald Trumps and his tax plans were making headlines in US trade, but this time there were more doubts about the timeline that they might occur. That was the key driver that helped push the US dollar, after what has been a strong run higher.
The USD weakness also came through in the USD/JPY, which fell away from the highs at 114.00 and are now pushing back to the 113 handle. The reality star was the GBP/USD who started gaining ground as it appears that the odds of a rate hike in the UK are now 90%, or in market terms – an absolute certainty.
This week is all about the Central Banks, with big announcements coming from the BOJ, BOE and of course the FOMC. So I expect markets to be a little muted early in the week.
After one session of declines, analysts are suggesting that the dollar is about to slow down. I’m not that keen to rule out the greenback just yet. We have support at 94.29, on the US Dollar Index (DXY) and I expect that we might get some more downside to get us back to that point. However, I’m still firmly bullish on the dollar and most of the majors. The only one I expect to make up ground this week is the GBP.
US Dollar Index (DXY) – 240 min Chart.
Top Economic Events
JPY – BOJ Policy Statement
EUR – Eurozone CPI
CAD – GDP
USD – Consumer Confidence
NZD – Employment
CHY – Manufacturing PMI
GBP – Manufacturing PMI
USD – FOMC Statement
EUR – German Unemployment
GBP – BOE Interest Rate Decision
AUD – Retail Sales
USD – Employment