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A pretty busy week for the dollar, which will price in the Fed’s policy decision AND all them NFP-related reports. Can it recoup its losses from the previous week?

Here are catalysts you should watch out for:

FOMC decision and presser (Jan. 30, 8:00 pm GMT)

For the first time this year, Federal Open Market Committee (FOMC) members will have a huddle about their monetary policies.

While no one expects policy changes from the Governor Powell and his gang, market geeks will stay tuned for Powell’s presser that’s scheduled 30 minutes after the release.

Specifically, they will look at how the Fed head honcho will balance between defending their view that the economy still has legs to warrant further tightening, and their bias changes amidst downside risks like the U.S. government shutdown, U.S.-China trade negotiations, and global economic slowdown.

Simply put, FOMC members will have a devil of a time conveying that “pausing” does NOT mean “stopping” their tightening ways.

Powell could also say a word or two about speculations that the Fed would stop unwinding its balance sheet sooner than they had planned. In his confirmation hearing in November 2017, Powell hinted that the Fed’s portfolio will be “down to a new normal” “in about three to four years.”

Well, analysts are now saying that Fed members could provide a more specific (read: sooner) timeline regarding their quantitative tapering (QT) program. If true, then we could see further rallies in the U.S. equities markets.

How will FOMC members execute their “flexible” approach? More importantly, how will markets react to any and all hints of future policy changes?

Don’t even think of missing this event!

NFP-related reports

Who’s ready to trade another NFP week? I hope you are!

The party will start with the ADP report (Jan. 30, 2:15 pm GMT), which could print a net addition of 178K following the 271K increase that we saw in December.

The annualized reading of Challenger job cuts (Jan. 31, 1:30 pm GMT) is next and we’ll be looking to see if it has improved from its 35.3% reading in December. Then, the weekly initial jobless claims, which has been hovering near record lows, is expected to print at 216K from last week’s 199K reading.

Finally, we’ll have the big NFP readings on February 1. Traders see non-farm payrolls falling back from 312K in December to 160K in January; the average hourly earnings is expected to slow down from 0.4% to 0.3%, and the unemployment rate is expected to remain at 3.9% for the month.

The government shutdown and a bit of retracement from last month’s strong numbers explain the weaker expectations for this month’s release. However, significant misses in key reports could raise speculations that the government shutdown and U.S.-China trade war have taken bigger bites in the labor market than many had expected.

Missed last week’s price action? Read USD’s price recap for Jan. 21-25!