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Powell and Mnuchin will talk pandemic stimulus in DC this week.

Will their testimonies help or hurt the dollar?

Here are points to watch if you’re trading the dollar this week!

Powell and the FOMC gang share their two cents

  • FOMC members (including Powell) will talk about the Community Reinvestment Act (Sept 21, 2:00 pm GMT)
  • Powell to testify on the CARES Act before the House Financial Services Committee in DC (Sept 22, 2:30 pm GMT)
  • Powell will talk about the economic impact of COVID-19 before the House Select Committee in DC (Sept 23, 2:00 pm GMT)
  • Powell will be back in DC, this time with Treasury Secretary Mnuchin to talk stimulus before the Senate Banking Committee (Sept 24, 2:00 pm GMT)
  • NY’s John Williams will participate in a panel discussion about “Economic Justice: Examining the Financial Burdens of Inequality and Striving for an Equitable COVID-19 Recovery” (Sept 21, 10:00 pm GMT)
  • Cleveland’s Mester to give a virtual speech (Sept 23, 1:00 pm GMT)
  • FOMC’s Williams will talk about economic inequality on Sept 24, 6:00 pm GMT and then about the job market on Sept 25, 7:10 pm GMT
  • FOMC’s Quarles to talk economic outlook at the Institute of International Bankers (Sept 23, 6:00 pm GMT)

Closely watched economic releases

  • Markit’s manufacturing PMI (Sept 23, 1:45 pm GMT) seen slipping from 53.1 to 53.0 in September
  • Markit’s services PMI (Sept 23, 1:45 pm GMT) to break its acceleration streak by weakening to 54.1
  • Initial jobless claims (Sept 24, 12:30 pm GMT) to print another decline (this time from 860K to 840K)
  • New home sales (Sept 24, 2:00 pm GMT) expected to slow down from 901K to 880K in August
  • Headline durable goods orders (Sept 25, 12:30 pm GMT) could sharply slow down from 11.2% to 2.0% while core figures could also dip from 2.4% to 1.2%

Dollar demand

  • The Fed’s pledge for low rates for longer got mixed reaction, but we could start to see longer-term reactions this week
  • U.S.’ trade conflict with China could heat up and inspire flights to safe havens like the dollar
  • Coronavirus-related updates (lockdown prospects, vaccine headlines, stimulus progress) will continue to affect risk sentiment and the demand for the dollar

Technical snapshot

  • Stochastic is flagging the dollar’s “oversold” conditions against the Kiwi and the yen
  • USD is near “overbought” levels against GBP and CAD on the daily time frame
USD Forex Pairs Stochastic from MarketMilk
USD Forex Pairs Stochastic from MarketMilk
  • SMAs show the dollar’s short and long-term bearish trends against the euro, Aussie, Kiwi, and the yen
  • USD/CHF is seeing short-term bullish pressure on the daily time frame
USD Forex Pairs SMAs from MarketMilk
USD Forex Pairs SMAs from MarketMilk
  • The dollar was most volatile against the Aussie, Kiwi, pound, and the euro in the last seven days
USD Forex Pairs Volatility from MarketMilk
USD Forex Pairs Volatility from MarketMilk

Missed last week’s price action? Read USD’s price recap for September 14 – 18!