The Dollar found itself in high demand last week, performance wise it was the best week for the US Dollar so far this year.
A combination of a hawkish speech from Janet Yellen reinforcing a December interest rate hike in the US, pushing up the probability of a rate hike before the end of the year to around 70% according to polls. The other factor contributing to Dollar strength at present are President Trump’s tax plans. The projected boost from the proposed tax cuts have caused a surge of investors to buy government based US bonds, which has in turn strengthened the Dollar.
US economic data in focus this week
Following hawkish comments from Fed Chair Janet Yellen, the markets are keenly watching this week’s data releases from the US.
This afternoon’s ISM manufacturing index was much better than expected and shook off any fears that the two devastating hurricanes, Irma and Harvey would cause a disruption to these figures. The data pointed out that there is no shortage of manufacturing activity just yet. There is no shortage of data releases this week so this could be a volatile trading week for those with interest in the US Dollar. However, the ISM data today has helped to ease investors’ fears that the US jobs data would be heavily impacted by the two hurricanes. This could be confirmed with US Jobs data due on Friday.
On Wednesday afternoon, we get a raft of data including Services PMI and EIA Crude Oil Stocks change. This is then followed by a speech from Janet Yellen during the evening (UK time).
Non-Farm Payroll data due on Friday
As we head towards the end of the week Non-Farm Payroll data in the United States will be of great importance for anyone with a Dollar requirement or indeed the need to exchange any of the perceived ‘riskier’ currencies, such as the Australian Dollar, New Zealand Dollar and South African Rand. This is due to be released at 13:30pm on Friday.
With a host of Federal Reserve members speaking this week, any further hints to US policy could send the US Dollar surging even further.
On a separate note, all of the team here would like to extend their thoughts and prayers to anyone affected by the horrible scenes witnessed in Las Vegas today.