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The dollar was top boss in last week’s trading. Will this week’s list of potential catalysts knock it down from its spot?

FOMC member speeches

FOMC (voting) members Quarles, Bostic, and Barkin are scheduled to make speeches early in the week.

However, Fed Chairman Powell’s speech in Zurich scheduled tomorrow at 7:15 am GMT might get more attention.

With the FOMC statement sounding less hawkish than many had expected, and with last Friday’s NFP report coming in mixed, investors will turn to the Fed head honcho for clues on just how committed the FOMC is to sticking to their three-rate-hike plan and how many might be considering a fourth one.

If Powell focuses on shrugging off higher inflation and employment numbers in favor of sticking to the plan, then we might see a bit of weakness for the Greenback.

U.S. CPI

Slight misses in March’s CPI readings gave investors doubt early in the U.S. session last month.

And why not? Headline CPI showed a 0.1% decrease – the first in 10 months – while the core reading popped up by 0.2% as markets had expected. Luckily for the bulls, the Fed’s minutes released on the same trading session sounded a bit more hawkish.

This time around analysts are expecting headline CPI to come in at 0.3%, while core CPI is expected to maintain its 0.2% growth.

The Fed has already hinted that it could tolerate a faster inflation without feeling too much pressure to raise its rates, so it would take a much faster rise in consumer prices for the dollar bulls to attack.

Trade -related updates

While there are no official meetings scheduled this week, market bees will likely buzz about NAFTA updates. See, word around the hood is that officials are rushing to structure deals before the U.S. and Mexican elections scheduled in a few weeks.

Meanwhile, investors will also want updates regarding the trade talks that the U.S. and China had over the weekend. Will the economic giants continue to threaten tariffs on each other? Or have they agreed to deals that could improve overall risk sentiment?

Last Week’s Price Review

The Greenback is the one currency to rule them all yet again (as of 5:00 pm GMT), marking the third consecutive week of top performance from the Greenback. The Greenback barely eked out a win against the yen, though, so there’s still a chance for the yen to claim total victory.

Overlay of USD Pairs: 1-Hour Forex Chart
Overlay of USD Pairs: 1-Hour Forex Chart

The Greenback started the trading week on a strong footing even though there weren’t really any apparent catalysts. But as noted in Monday’s London session recap, U.S. bond yields were initially on the rise, so we were likely seeing a continuation of last week’s themes.

U.S. bond yields did eventually dip during Monday’s U.S. session but the Greenback just soldiers on. And as noted in Monday’s U.S. session recap, it’s possible that the Greenback may have been feeding off the euro’s weakness, as well as getting a boost from the somewhat positive U.S. data on Monday.

Other market analysts, meanwhile, were also saying that the Greenback was taking advantage of the euro’s strength, but they added that U.S. bond yields remain elevated (despite the slide) and that may have enticed more Greenback bulls to jump in.

The Greenback’s rally finally stalled after ISM released a worse-than-expected U.S. manufacturing PMI reading (57.3 vs. 58.4 expected, 59.3 previous).

The Greenback then traded mostly sideways after that before getting slapped broadly lower thanks to the FOMC statement. And as mentioned in Wednesday’s U.S. session recap, this was likely because the Fed revised its language on its outlook, which may have been then interpreted to be more dovish.

At any rate, the Fed’s overall message wasn’t really derailed, so bulls tried to take control. However, sellers ultimately prevailed.

Greenback bulls tried their luck again just before and after the U.S. released a bunch of net positive data. Sadly for USD bulls, ISM’s non-manufacturing PMI was a disappointment (56.8 vs. 58.1 expected,  58.8 previous) so the Greenback turned lower again.

The Greenback finally regained its mojo (except against the yen) ahead of the NFP report on Friday, likely because of short-covering and/or preemptive positioning.

And as it later turned out, the NFP report was mixed but negative overall. Sure, the jobless rate eased from 4.1% to 3.9%, which is the lowest since December 2000. However, the jobless rate improved partially because the labor force participation rate deteriorated from 62.9% to 62.8%. Also, wage growth and jobs growth both failed to meet expectations.

And since the NFP report was negative overall, the Greenback’s initial reaction was to take a dive across the board.

However, Greenback bulls quickly charged in and pushed the bears back. And some market analysts say that bulls were enticed to attack because the poor jobs report was not enough to derail rate hike expectations.

Still, selling pressure was evidently present since the Greenback eventually started to retreat against most of its peers again.