The US dollar suffered a broad reversal last week, declining 2 percent against a basket of trade-weighted currencies, as tepid economic data curbed rate-hike speculation. The US dollar index closed at 97.40 last Friday. It had re-tested the 100.00 level at the beginning of the week.
Durable goods orders, home sales and PMI data headline the US economic calendar this week. A spate of central bank speeches and policy deliberations will also impact the path of US dollar pairs this week.
Below is a summary of the key economic events for the US dollar this week.
Reserve Bank of Australia Governor Glenn Stevens will speak in New York at the American Australian Association luncheon hosted by Goldman Sachs.
Bank of Canada Governor Stephen Poloz will also participate in a panel discussion at the Bloomberg Americas Monetary Summit in New York.
German ZEW economic sentiment data will be released on Tuesday. The gauge of investors’ sentiment is expected to strengthen in April for a sixth consecutive month, signaling improvement in the German economy, despite ongoing concerns about Greece and Ukraine.
Australian inflation data make headlines in mid-week trading. The RBA will release its Q1 trimmed mean CPI, which is expected to show an increase of 0.6 percent, down from 0.7 percent in the previous quarter.
In Europe, the Bank of England will release the minutes of its April policy meetings, which are expected to show another 9-0 vote in favour of keeping interest rates at 0.5 percent. The minutes will show the Monetary Policy Committee’s final deliberations between the general elections on May 7, which is expected to be the closest parliamentary elections in decades.
In the United States, the National Association of Realtors will report on existing home sales for March. Existing home sales are forecast to rise to 5 million in March from 4.88 million the previous month.
The GfK German consumer confidence survey makes headlines in the European session. The monthly gauge of German consumer sentiment is forecast to improve to 10.2 in May form 10.0 in April.
Separately, Markit Group will report on German and Eurozone manufacturing PMI and services PMI. Both indicators are expected to show continued strength in the German and Eurozone economies in April.
Markit Group will also report on US manufacturing PMI. The US manufacturing industry in March recorded its biggest improvement in five months, as output and new orders rebounded.
Separately, the Commerce Department will release new home sales data. March new home sales are forecast to decline to a seasonally adjusted annual rate of 523,000, from 539,000 in February.
Eurozone finance ministers will descend on Brussels on Friday to kick off the Eurogroup Meetings. The forthcoming meetings are crucial for Greece, which is required to table a new list of specific reforms by Friday in order to secure its next bailout tranche, valued at around $8 billion. A failure to reach an agreement puts Athens on a direct path toward default.
In economic data, the German Ifo business climate survey will be released on Friday. All three of the index’s main components – current assessment, business climate and expectations – are forecast to improve in April.
In the United States, the monthly report on durable goods orders will make headlines. Orders for durable goods meant to last three years or more are forecast to rebound 0.8 percent in March after dropping 1.4 percent in February.
For a detailed forecast of how specific US dollar pairs will be impacted by this week’s events, refer to our weekly forecast.