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Traders dropped the dollar like it was hot last week. Can this week’s catalysts inspire some retracement?

CPI (Mar 11, 12:30 pm GMT)

  • Consumer price growth slowed down from 0.2% to 0.1% in January despite higher costs of shelter, food, and medical care services
  • COVID-19 fears dominated price action then, so USD still gained across the board
  • Markets see the headline CPI at 0.0% in February
  • Core CPI is expected to maintain its 0.2% reading

PPI (Mar 12, 12:30 pm GMT)

  • Headline and core PPI came in at 0.5% in January when traders only saw 0.1% increases for both reports
  • Analysts estimate a 0.1% dip in headline PPI while core PPI could slow down to 0.2%

Market risk sentiment

  • USD fell like a rock last week. Look out for potential retracements especially on any optimistic news concerning COVID-19
  • Unless Fed members give speeches that hint at further easing, it’s likely that COVID-19 and global growth concerns could once again boost the dollar
  • Major calendar releases, such as ECB’s policy decision and China’s CPI can also affect the demand for the safe havens

Technical snapshot

  • USD has lost pips to all its major counterparts except CAD in the last 7 days

Missed last week’s price action? Read USD’s price recap for March 2 – 6!