Can the dollar strengthen further against its counterparts this week? Here are events that might influence the Greenback’s price action.
CPI reports (Feb 13, 1:30 pm GMT)
U.S. consumer prices fell for the first time in nine months in December, as a decline in gasoline costs weighed on headline numbers.
The monthly rate declined by 0.1%, the first drop and the weakest since March. The annualized figure wasn’t much better with a 1.9% reading after November’s 2.2% increase.
Core figures remained strong, however, thanks to the rise of health care and rental housing costs. Meanwhile, the Fed’s closely-watched core personal consumption expenditures (PCE) price index popped up by 1.9% from a year ago in November after rising by 1.8% in October.
This week, analysts expect to see a 0.1% uptick (from -0.1%) for the monthly rate and an unchanged reading of 0.2% for the core figure.
Waiting for inflation to rise to uncomfortable levels is one of the reasons why the Fed can afford to take a chill pill in its rate hike schedule. But if we see spikes or significant misses in this week’s releases, then we might see more speculations over the Fed’s next moves.
U.S. government deadlines
If you think not having a date by Valentine’s Day is bad, try not having a national budget!
Back in January 25, Trump agreed to end a 35-day partial shutdown without getting the $5.7B funding that he needed to pay for his promised wall.
The three-week reprieve gives the U.S. House of Representatives AND Senate until Friday (February 15) to get a budget deal on the table for Trump to sign. If they don’t meet the deadline, then we could be looking at another partial shutdown.
Unfortunately, word around is that talks have stalled as lawmakers have yet to find common ground over immigration detention policies.
If that’s not pressure enough, the U.S. will also enter the last weeks of trade-related negotiations with China.
Low-level talks are scheduled to start as early as today in Beijing, while high-level talks between U.S. Trade Representative Robert Lighthizer, U.S. Treasury Secretary Steven Mnuchin, and Chinese Vice-Premier Liu He are set to happen on Thursday and Friday.
Remember that the 90-day trade truce between the U.S. and China is set to expire on March 1. If the deadline passes without a deal, then the U.S. will up its tariffs on $200B worth of Chinese imports from 10% to 25%. Yipes!
Missed last week’s price action? Read USD’s price recap for February 4 – 8!