The dollar got some last-minute boost from the NFP report last week. Can this week’s catalysts extend its bullish run?
Here’s a list of events you’ll want to watch out for:
CPI reports (Apr 10, 1:30 pm GMT)
Consumer prices in the U.S. rose by 0.2% in February, which was way better than the flat reading in January and the 0.1% decline in December.
The report also revealed a 0.1% (vs. 0.2% expected) gain in core consumer prices and an annualized rate of 1.5% (down from 1.6%) Apparently, the rise of food, gasoline, and rent prices led the overall price increases.
Unfortunately for dollar bulls, traders had fixated on the core CPI miss which, together with a disappointing PPI report, dragged the Greenback lower ahead of the Fed’s meeting.
This time around analysts see headline consumer prices clocking in a 0.3% growth in March. The core figure is also expected to improve from 0.1% to 0.2%, while the annualized reading is seen at 2.1%.
Given that Trump recently said that “The Fed should drop rates” because “[t]here’s no inflation,” weaker-than-expected CPI numbers this week could inspire more speculations of a Fed rate cut as early as this year. Yipes!
FOMC meeting minutes and speeches
In its meeting in late March the FOMC gang surprised markets by nixing their plans to raise rates further this year and sharing that they’re slowing down the tightening of their inflated balance sheet.
Last but definitely not the least, Governor Powell and his friends lowered their GDP expectations for this year and the next.
Can this week’s meeting minutes shed more light on the Fed’s sudden shift to dovishness? If the event doesn’t shed enough info for you, then maybe the speeches from FOMC members scheduled over the next couple of days will.
If you look at the forex calendar, you’ll see that members such as Clarida, Bullard, Williams, Quarles, and Bowman are expected to take center stage over the week. Make sure you don’t miss any sound bite that they offer!
Missed last week’s price action? Read USD’s price recap for April 1 – 5!