No key macroeconomic data capable of significantly impacting the Dollar’s positions is planned for the coming week. The most important release will be the retail sales data which will be published on Tuesday at 12:30 GMT. Reports from the US over the past weeks are of a positive nature and steadily improve the prospects of the world’s largest economy. However, the economic activity revival is observed in all developed economies of the world. Therefore, the currency market participants also start paying attention to more profitable currencies.
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The US Dollar continued to remain under pressure over the period of August 5-9 despite the Federal Reserve representatives having signaled that the Federal Open Markets Committee can start the quantitative easing program folding in September. Moreover, the continuously improving macroeconomic situation also failed to support the quotes of the world’s main reserve currency. The market observes a growth of appetite for more profitable instruments as the audit improves in all key regions of the world’s economic activity.
The coming week will become the first week of the new months, so it will be traditionally filled with key macroeconomic data. On Monday, July 1 (14:00 GMT), the Supplies Management Institute will publish the PMI index data in the industrial sector, and on Wednesday at the same time – a similar data in the non-industrial sector. Both indicators have a very high surpassing correlation with the economic trend and can have a significant impact on the investros’ mood. In June, the reports have somewhat escalated the situation, after the industrial index dropped below the recession border mark of 50%, having reached the 49.0% value.
The US Dollars has continued strengthening over the period of June 24-28 as the topic of the possible upcoming commencement of shortening the third round of quantitative easing by the US Federal Reserve continued dominating the market. The US macroeconomic data, released over this period, was also of a positive nature, which provided additional support for the world’s main reserve currency. Durable consumption goods orders bet the forecasts and the consumer expenses, which account for 70% of the GDP, grew by 0.3% in May. With this background, the USDX index, being a correlation to a basket of the world’s six leading currencies, increased by 0.7%.
The US Dollar has strengthened its positions over the period of May 13-17 as the economies of its main rival currencies either continue to remain in recession or slow down at a lot higher pace than that of the US. In particular, the Eurozone continues to remain in recession for already the sixth quarter in a row. Besides that, the Bank of Japan has received support from the G7 countries regarding its planned quantitative easing program. With this background, the USDX index in the second half of the day on Friday has gained 0.9% in the week’s aftermath. Additional support for the American currency is being provided by statements of some US Federal Reserve representatives about the regulator considering the possibility of decreasing the quantitative easing program’s volumes as soon as the end of the summer.