The US dollar ended the past trading week relatively flat. What factors will drive the US dollar over the current week and what traders can expect from the greenback?
One of the major events for the US currency during the week will be the release of monetary policy meeting minutes by the Federal Reserve. While the Fed did not change its monetary policy at the latest gathering, it shocked markets by dropping plans for hiking interest rates further this year. The notes may provide additional insights into what worried US policy makers and how much exactly dovish they are.
As for macroeconomic reports, inflation data will be the highlight of the week. Analysts estimated ahead of the official releases that monthly consumer inflation accelerated to 0.3% in March from 0.2% in February. Producer inflation also increased, rising from 0.1% to 0.3%.
Another relatively important report will be the preliminary estimate of the consumer sentiment in April from the University of Michigan. It is expected that the index will show a small decline from 98.4 to 98.1.
Looking at what analysts had to say, DailyFX did not provide specific forecast for the US dollar, mentioning though that the US currency will likely feel impact of events from outside of the United States, like the monetary policy meeting of the European Central Bank and developments in the Brexit drama.
Indeed, while Forex Crunch was bullish on the dollar in its forecasts, it was more due to the expected weakness of other currencies rather than due to the strength of the greenback itself.
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