USD Weekly Forecast – Monetary and Fiscal Stimulus Under the Spotlight

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This week, eyes will be on Fed Chairman Powell for clues on the next step in monetary policymaking.

Meanwhile, Congress is no closer to making a deal than it was weeks ago.

Feeling like trading the dollar this week?

I’ve listed down the market themes you can pay attention to:

Closely watched data releases

New home sales (Aug 25, 2:00 pm GMT) to dip by 4.6% after 13.8% jump in June
Core durable goods orders (Aug 26, 12:30 pm GMT), which hints at long-term spending for businesses, is expected to gain by another 1.7% after a 3.3% increase in June
Preliminary GDP (Aug 27, 12:30 pm GMT) – the second GDP estimate – is expected to be revised higher from -32.9% to -32.6% in Q2 2020
Initial jobless claims (Aug 27, 12:30 pm GMT), which went back above 1M last week, could “only” print at 940K this week
Annualized core CPE price index (Aug 28, 12:30 pm GMT) – the Fed’s preferred gauge of consumer prices – is estimated at 1.1% from a 0.9% reading in Q1 2020
Chicago PMI (Aug 28, 1:45 pm GMT) to decline from 51.9 to 47.5 in August

The virtual version of the annual Jackson Hole symposium is expected to hint at monetary policy trends of major central banks during and immediately after the pandemic
Fed Chairman Powell’s anticipated speech is on Aug 27, at 1:10 pm GMT

U.S. policymakers are no closer to making another stimulus deal even as jobless benefits and the moratorium on evictions had already expired. The longer the negotiations go, the longer analysts can price in an economic recovery for Uncle Sam
Tensions between the U.S. and China, the world’s two largest economies, will drag on overall risk-taking. In an interview, Trump threatened that “we don’t have to” do business with China

The dollar has seen the most volatility against GBP, NZD, AUD, and CHF in the last seven days