What are the recent market trends?
Demand for the US dollar intensified in recent movement, up 1.07% on the week, according to the US dollar index.
By way of five consecutive daily bullish candles, the greenback claimed 96.50 status and clocked highs of 96.69 into the close.
Investors are clearly showing concern amid growing worries of a global slowdown.
Several major central banks turned dovish which could potentially explain why US stocks failed to sustain an upside presence last week.
Further adding to this, trade talks between China and the US appear to be stalling, with US President Trump recently commenting he has no scheduled meeting with Chinese President Xi.
Meanwhile, in other currencies:
AUD selling due to poor retail sales
A key underperformer last week, the Australian dollar fell sharply against its US peer, down 2.23%.
Dwelling approvals out of Australia Monday fell a further 8.4% in December following a 9.8% drop in November.
Weighed on by local data and a strengthening US dollar, the AUD/USD carved out its second consecutive loss from an overall peak of 0.7295 printed Thursday.
In the early hours of Tuesday, the market experienced a bout of selling amid poor Australian retail sales and a larger-than-expected trade surplus, though swiftly found support off lows at 0.7193.
This – coupled with RBA Governor Lowe shifting forward guidance to a more neutral bias vs. the prior tightening stance – collectively weighed on the commodity currency.
On-going Brexit indecision
The British pound, another laggard, down 1.06% vs. the US dollar by the close of trade last week, was weighed on by a mixture of on-going Brexit indecision, a UK services PMI miss and a selloff post BoE announcement.
As expected, the central bank opted to stand pat on rates at 0.75% with a 9-0 vote in doing so.
Shortly after, though, BoE Governor Carney struck a more balanced and non-committal tone in the press conference, providing much-needed impetus and pulling cable all the way back up to highs just south of key figure 1.30.
Schedule of Important Economic News and Events
Last week, the US dollar strengthened against currency majors.
The dollar index (#DX) reached new monthly highs and closed in the positive zone.
The trade conflict between Washington and Beijing is in the spotlight.
The Bank of England and the Reserve Bank of Australia kept the main parameters of monetary policy at the same level.
Demand for the US currency is still at a fairly high level.
In the upcoming trading week, we recommend paying attention to the following macroeconomic events.
Monday, February 11th
On Monday, investors will assess economic reports from the UK:
- GDP data at 11:30 (GMT+2:00);
- Manufacturing production at 11:30 (GMT+2:00).
Tuesday, February 12th
On Tuesday, the news feed will be fairly calm. At 17:00 (GMT+2:00) data on JOLTS job openings will be published.
Wednesday, February 13th
On Wednesday, A meeting of the Reserve Bank of New Zealand will be held on Wednesday at 03:00 (GMT+2:00).
The regulator is expected to keep the key interest rate unchanged at 1.75%. Important statistics:
- UK consumer price index at 11:30 (GMT+2:00);
- Report on inflation in the US at 15:30 (GMT+2:00).
Thursday, February 14th
On Thursday, we expect the publication of important economic reports:
- Japan GDP at 01:50 (GMT+2:00);
- German GDP at 09:00 (GMT+2:00);
- Producer price index in the US at 15:30 (GMT+2:00).
Friday, February 15th
On Friday, financial market participants will assess the following statistics:
- Consumer price index in China at 03:30 (GMT+2:00);
- Retail sales in the UK at 11:30 (GMT+2:00);
- Retail sales in the US at 15:30 (GMT+2:00).