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No love for the Greenback this week thanks to a steady stream of weak U.S economic updates, positive sentiment on economic re-openings, and rising geopolitical tensions with China.

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

Tuesday:

Broad positive risk sentiment (continued  recovery hopes and vaccine development news) was likely the driver for the dollar’s broad move lower, starting in the Asia session. It’s also likely the rising tensions between the U.S. and China over Hong Kong (China warns US against sparking Cold War, U.S. Moves to Audit Chinese Firms. Market Frets Over What Comes Next.) were volatility drivers as well.

U.S. Consumer confidence for May rises to 86.6, vs 82.3 expected

US home price growth picked up in March despite COVID-19

New U.S. home sales rise slightly in April despite coronavirus-related shutdowns

Fed’s Bullard warns prolonged coronavirus lockdown could trigger an economic depression

Fed’s Bullard Sees Jobless Rate Returning Below 10% by Year-End

Dallas Fed Survey: Texas manufacturing sector continues contraction

U.S. house prices rose in the first quarter of 2020, up 1.7% according to the Federal Housing Finance Agency (FHFA) House Price Index

Philly Fed May 2020 Nonmanufacturing Business Outlook Survey shows continued weakness.

The Chicago Fed’s national activity index registered at a negative 16.74 in April, down from a revised negative 4.97 in March

Wednesday:

U.S. Mortgage demand from homebuyers shows unexpectedly strong and quick recovery, as applications spike 9% from a year ago

Richmond manufacturing index rose from a record low of −53 in April to −27 in May

Fed’s Beige Book says businesses are pessimistic about pace of a recovery

Texas service sector activity in March and April showed signs of abating in May

Fed’s Bullard: Expanded unemployment pay not appropriate as recovery takes hold

Strong rally in the Greenback against the majors, this time as traders retreated to the U.S. dollar as a safe haven as risk sentiment shifted negative, this time possibly on geopolitical tensions rising (e.g., U.S. weighs sanctions on Chinese officials, firms over Hong Kong, China approves controversial national security bill for Hong Kong).

Thursday:

U.S. initial jobless claims rise 2.12 million in latest week while continuing claims decline

Durable-goods orders plunge 17.2% in April vs. forecasts for 18.2% drop

U.S. Pending home sales plummet in April, but demand is showing signs of a rebound

Along with the weak U.S. economic updates, it’s likely the broad move lower in the Greenback against most of the majors during the London / U.S. session overlap was likely due to the continued positive global risk sentiment, which may have stemmed on this session from Europe as the bigger-than-expected recovery fund proposal may be brightening up the outlook in Europe.

Friday:

Fed’s Mester says it’s hard to imagine quick V-shaped recovery

US Personal income surges 10.5% in April on the back of government relief payments but spending lags

US Trade deficit in goods widens to $69.7 billion in April, advanced data show

Wholesale inventories for April, were estimated at an end-of-month level of $651.5B, up 0.4% from March 2020, and were down 2.6% from April 2019

UMich consumer sentiment rises to 72.3 in May from 71.8 in prior month

Next coronavirus stimulus bill will be the ‘final’ one, Mitch McConnell says

Trump orders his administration to begin eliminating Hong Kong privileges