Dollar Weekly Overview 19 - 23 FEB

All eyes on the dollar. Yes, that’s the current situation in the Forex market. The American currency is struggling to recover for two weeks already, rising uncertainty about its future.

Meanwhile, the Trump administration insist on the fact they want to see a stronger dollar in the future. The million-dollar-question is: how do they plan to do so?

The Federal Open Market Committee (FOMC) opted to leave its benchmark interest rate steady in a range between 1.25 and 1.50 percent during its last monetary policy encounter.

By the time that meeting took place, market participants did not expect policy adjustments. It was Janet Yellen’s last meeting as Chairwoman of the FOMC.

However, the tone was pleasantly surprising for investors. The Federal Reserve said it remains consistent on its plan to hike rates in at least three opportunities this year.

Why am I telling you this? On Wednesday, the Fed will present its minutes from its latest monetary policy meeting, which offer more clarity over the future plans of the regulator.

On the sidelines, we are expecting FOMC members to give a series of speeches that could potentially offer verbal support for the greenback.

On Thursday, Randal Quarles is set to speak at 05:15 GMT, followed by William Dudley at 15:00 GMT and Raphael Bostic at 17:10 GMT.

On Friday, Dudley will take the lead with a speech scheduled at 15:15 GMT, Loretta Mester at 16:30 GMT and John Williams set for 20:40 GMT.

Speeches are likely to boost speculation on further monetary changes for the near future, which ultimately helps the dollar increase its physical demand and position against competitors.

The US dollar index, which measures the greenback against six major currencies, was trading 0.31 percent lower at 88.23 by the time of this writing. Last week, the USDX fell 1.46 percent.

Ahead in the week, these publications are expected to create more volatility for the dollar:

• Manufacturing and services PMIs for February
• Existing home sales
• FOMC minutes
• Initial jobless claims

FortFS