USD Weekly Review (Feb. 3 – 7)

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The Greenback takes the top spot this week, likely due to the string of net positive business sentiment and employment data from the U.S.

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:

  • IHS Markit U.S. Manufacturing PMI: 51.9 in Jan., up slightly from the flash figure of 51.7, but down from 52.4 in Dec.
  • ISM Manufacturing PMI comes in at 50.9 for Jan., the highest level since July, from an upwardly revised 47.8 in December

Tuesday:

  • White House economic adviser does not see U.S. economic ‘disaster’ from coronavirus
  • U.S. factory orders increase 1.8% in December
  • We started to see divergence in USD performance on Tuesday, indicating a rising influence from global risk sentiment. Sentiment started off positive this week, likely due to the news of stimulative efforts from the People’s Bank of China to support the likely hit China will take due to the Coronavirus outbreak, and accelerated on Tuesday on news that a vaccine for the Coronavirus is ready for testing. This is likely the driver for USD’s underperformance to the comdolls while continuing its rise against the rest of the majors.

Wednesday:

  • U.S. Private payrolls soar in January, the best monthly gain in nearly 5 years
  • The U.S. monthly international trade deficit increased in December 2019 to $48.9B vs. $43.1B in November
  • U.S. Business activity growth accelerates to 10-month high at start of 2020′
  • January’s ISM non-manufacturing index comes in at 55.5, vs 55 expected
  • We can see further price action divergence between the USD pairs during the Wednesday session, possibly related to the news of a breakthrough in the race for a vaccine by a British scientist pushing global risk sentiment further positive.
  Forecast for AUD/USD on Apr 2, 2020 - Forex Alchemy

Thursday:

  • US GDP may fall short of 3% this year because of Boeing’s 737 Max woes, Mnuchin says
  • U.S. job cuts double in January to 67K
  • US productivity rebounds in fourth quarter as labor costs growth slows
  • U.S. weekly jobless claims at nine-month low; productivity rebounds

Friday:

  • U.S. Non-farm payrolls increased by 225,000 jobs last month; unemployment rate rises to 3.6%
  • U.S. December wholesale inventories revised lower
  • Federal Reserve Monetary Policy Report : February
  • White House adviser: Xi told Trump that China will meet trade targets despite virus
  • FOMC’s Quarles: Interest rates in ‘good place’ despite ‘notable risks’
  • Coronavirus related fears sent risk sentiment back to the negative on the Friday session on news that 41 passengers on a cruise ship quarantined off Yokohama test positive for coronavirus, and concerns the outbreak will do much more economic damage to China than previously anticipated. This reversed USD’S underperformance against the “risk currencies” (Aussie and Kiwi) to place the U.S. dollar as the number one performing major currency for the week.

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