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We saw a busy week of news flow for the U.S. dollar with catalysts ranging from political news, lots of Fed speak and mostly signs of improvement from the latest U.S. economic updates.

But the likely main driver for the Dollar’s relative underperformance was steadily rising positive risk sentiment as traders focused on a potential new stimulus package potentially coming soon from the U.S. government.

Overlay of USD Pairs: 1-Hour Forex Chart
Overlay of USD Pairs: 1-Hour Forex Chart
USD Weekly Performance from MarketMilk
USD Weekly Performance from MarketMilk

United States Headlines and Economic data

Monday:

Cleveland Fed’s Mester says U.S. must do more to promote inclusive economy

Manufacturing Activity in Texas Quickens in September to a 2-Year High — Dallas Fed

Tuesday:

House Unveils New Stimulus Package as Pelosi and Mnuchin Resume Talks

Philadelphia Fed’s Harker: Recovery ‘should continue’ if new virus outbreaks limited

U.S. goods trade deficit rises; inventories increase

NY Fed’s Williams stresses importance of financial markets resilience

S&P CoreLogic Case-Shiller Index Reports 4.8% Annual Home Price Gain in July

US Consumer confidence to the moon in September – largest gain in 17 years

Wednesday:

Companies added better than expected 749,000 jobs amid jump in construction, hospitality, ADP says

Chicago Business Barometer – Surges to 62.4 in September

US Mortgage applications decreased 4.8% from one week earlier

U.S. economy plunges 31.4% in the second quarter but a big rebound is expected

A round of broad risk-on behavior was likely the spark for the drop in USD during the U.S. session after Treasury Secretary Mnuchin said he is ‘hopeful’ White House and Democrats can strike a coronavirus stimulus deal

U.S. pending home sales race to record high in August

One Day, Thousands of Job Cuts: Economic Pain Is Deepening

Fed’s Kashkari expects continued economic recovery but only in a ‘grinding’ fashion

Fed’s Bowman sees bumpy recovery, warns on asset prices

Fed’s Bullard Breaks With Peers on Fiscal Aid, Says It Can Wait

Thursday:

U.S. weekly jobless claims total 837,000, vs 850,000 estimate

Trump signs bill to prevent government shutdown after funding briefly lapses

House delays vote on $2.2 trillion coronavirus stimulus bill to allow more time for talks

U.S. Consumer spending rose in August; economy on track for record Q3 growth

IHS Markit U.S. Manufacturing PMI: Strongest improvement in operating conditions since January 2019

Job cuts announced by U.S.-based employers jumped up 2.6% m/m to 118K, up 186% y/y

ISM Manufacturing PMI for September was down 0.6 to 55.4.

Friday:

The last Asia session drop in USD correlated with news that U.S. President Donald Trump tested positive for COVID-19.

White House says Trump ‘not incapacitated’, working from isolation; Pence negative

Trump experiencing ‘mild symptoms’ after coronavirus diagnosis

Nonfarm payrolls rose by 661,000 in September, lower than the 800,000 Dow Jones estimate – this was a big disappointment, but the reaction to the update was mild as the markets were focused on developments with the U.S. President.

University of Michigan Consumer sentiment revised to 80.40 in Sept. vs. 74.2 in August.

Inside one celebration that helped spread the virus across the US government

21 states have rising coronavirus case counts