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Countercurrency price action and maybe a bit of profit-taking dragged the Greenback to the bottom of the forex heap last week. Here’s a list of catalysts that might change the tides for the dollar.

CPI report (June 12, 12:30 pm GMT)

Last month’s inflation data weighed on the dollar, as it missed estimates. In fact, consumer prices were mostly propped higher by oil and gasoline prices. This incited speculations that the Fed won’t feel much pressure to raise its rates.

This week analysts see inflation maintaining its 0.2% reading while the core figure is also expected to remain at 0.1%. Hits or misses could cause intraday spikes especially as traders look for clues ahead of the Fed’s policy statement. Oh, and keep your eyes peeled for possible profit-taking ahead of the Fed’s event!

FOMC statement and presser (June 13, 6:00 pm GMT)

In its meeting minutes last month FOMC members hinted that they’re looking into taking “another step in removing policy accommodation” if reports print in line with their expectations.

In addition to that, members also think it’s cool to maybe let inflation run above 2.0% for a bit, as it could also help anchor expectations to the team’s inflation targets.

At the end of the day, members had already “expressed a range of views” on how to proceed with policymaking.

Fast forward to this week when everyone and his/her cat are expecting Jerome Powell and his team to raise their interest rates by another 25 basis points in June.

Keep in mind that the Fed will also publish its latest economic projections and conduct a presser 30 minutes after the statement to shed more light on their decision.

Watch the projections closely to see if the members are thinking about a FOURTH rate hike this year, or at least some tweaks in other policies that might lead to less stimulus.

Retail sales report (June 14, 12:30 pm GMT)

Much like the inflation release, April’s retail sales report also missed analysts’ estimates.

Luckily for the bulls, underlying data looked good enough, March’s figures were revised higher, and other traders paid closer attention to Fed members’ speeches.

This week consumer spending is expected to print a 0.4% growth for the month of May, while the core figure is estimated to remain at 0.3%. Leading indicators point to consumers being energized by tax cuts and relatively good weather, but watch your positions closely in case we see downside surprises!

Last Week’s Price Review

The Greenback is THE biggest loser of the week (as of 5:00 pm GMT), marking the second week of Greenback weakness.

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

And like last week, the Greenback’s price action looks rather messy. However, that’s because USD/JPY is an outlier yet again. And if we remove USD/JPY from the overlay, then we get this.

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

As you can see in the chart above, the Greenback started the week by slumping hard. There were no direct catalysts for the Greenback’s weakness, but as noted in Monday’s morning London session recap, it’s possible that some traders were just wary of being too bullish on the Greenback because of trade-related fears.

After all, Canada and Mexico to announced retaliatory tariffs against the U.S. last week after U.S. announced that it will push through with its planned tariffs on aluminum and steel.

Also, trade talks between China and the U.S. didn’t really pan out over the weekend.

And to that I’d add the possibility that stronger demand for the euro at the Greenback’s expense, thanks to easing political fears in Italy.

The Greenback later recovered during Monday’s U.S. session. There were no clear catalysts for that, though, and economic reports released at the time failed to impress.

Anyhow, the Greenback then became mixed while trading roughly sideways after that before encountering heavy selling pressure across the board during Tuesday’s U.S. session.

Oddly enough, the Greenback began getting sellers when ISM’s non-manufacturing PMI printed a stronger-than-expected reading (58.6 vs. 57.9 expected, 56.8 previous).

It’s not really clear why, though, since all sub-indices printed stronger readings, with the exemption of the slide in new export orders.

At any rate, the selling pressure later intensified after Bloomberg released a report that claimed that the ECB will likely discuss ending its QE program during next week’s ECB meeting, which implies that the market players were favoring the euro at the Greenback’s expense.

More signs that the Greenback was being slapped around by the euro emerged on Wednesday a bunch of ECB officials gave some rather hawkish comments, starting with ECB Chief Economist Peter Praet.

The Greenback then continued to trade lower against its peers after that, before becoming more mixed come Thursday.

However, the Greenback began to find support during the U.S. session and later began to climb higher during Friday’s London session. As noted in Friday’s London session recap, there was no clear reason for the Greenback’s climb, but it’s possible that traders were using the Greenback as a safe-haven and/or the Greenback was gaining strength because the euro was suffering at the time. It’s also possible that Greenback bears were just covering their shorts.

The damage was already done, though, and there was even some extra selling pressure near the end.