Here’s a list of potential market movers for the dollar. Clue: they’re not all data-related. Check it!
FOMC meeting minutes (Aug 21, 7:00 pm GMT)
As everyone and their momma expected, the Fed cut its interest rates by 25 basis points in late July, its first rate cut since 2008.
What traders didn’t expect was for two members to say “nay” to the decision. The dissent combined with a lack of urgency in the text to cut its rates some more (traders were pricing in TWO rate cuts this year) helped boost the dollar in the first hours of the release.
This week we’ll see just how open other FOMC members are to further lowering their interest rates. Is the team considering a second “insurance” rate cut? Or are they just starting a cycle of even more rate cuts?
While traders are waiting for events scheduled later in the week, the dollar could react to lower-tier reports from Uncle Sam.
The crude oil inventories report due on Wednesday at 3:30 pm GMT, for example, could either support or relieve crude oil’s intraweek trends.
Then, Markit’s flash manufacturing PMI due on Aug 22 at 2:45 pm GMT is expected to inch higher from 50.4 to 50.5 in August, while its services counterpart is seen at 52.9 after clocking in at 60.0 in July.
Last but not the least are the new and existing home sales data scheduled on Wednesday and Thursday.
These reports don’t usually influence the dollar’s price action for long, but they can cause a blip or two during their releases!
Jackson Hole updatesWhile the minutes of the Fed’s last meeting is a BFD, that’s also a bit outdated considering that the meeting was held before the U.S. bond markets went cray and the U.S.-China trade tensions further escalated.
This week all eyes will be on FOMC Chairman Powell’s speech scheduled on Friday at 3:00 pm GMT. Watch out for hints that the Fed head honcho is paying attention to more than lagging data points.
If Powell hints that recent developments have convinced the Fed to be more dovish, then we could see the dollar weaken and higher-yielding assets shoot up.
But if he and his team suggest that they’ll be on a wait and see mode after making their insurance rate cut/s, then we could see a bit of risk aversion across the board.
Did you forget that the world’s two largest economies are in the middle of a trade war?
On this week’s episode, Trump is expected to resolve a cliffhanger by announcing whether or not his administration is extending Chinese tech giant Huawei’s “temporary general license” that allows the company to still do some business in the U.S. even while it’s on the Commerce Department’s trade blacklist.
Reuters reported Friday that the Commerce Department could extend the grace period by another 90 days. The Donald threw a plot twist over the weekend, however, when he shared that he doesn’t want to do business “at all because it is a national security threat.”
Plot’s getting thicker, yo!