The US dollar last week was in demand (Weekly Review)

2019-02-19
Last week the attention of participants in financial markets was focused on the US-China trade negotiations. Optimism in terms of their results contributed to the preservation of bullish sentiment in the stock markets and bearish in relation to the Japanese yen which is traditionally an asset “shelter” during political and / or economic crises. Against this background the US dollar paired up with it was able to advance into the region of the 111th figure but failed to break through it.

Released US macroeconomic statistics could not support the dollar. Data on retail sales were worse for a rather long period of time which further increased doubts about the Fed's further tightening of monetary policy. At the same time the threat of the “tough” version of Brekzit and the weak performance of the eurozone economy and its member countries leave the British pound and the euro vulnerable.

The British Prime Minister Theresa May plans to re-discuss the conditions for Britain’s withdrawal from the European Union with the leaders of its member countries although Brussels has repeatedly stated that the current draft agreement is final and not negotiable. Nevertheless the pound still managed to win back some of the losses incurred by the end of the week while profit taking on long positions in the dollar contributed to the recovery of the euro. In general there are still no reasons for optimism among bulls in pound and euro and these currencies may again be under pressure from the dollar.

This week is scheduled:

Monday, February 18
10:00 GMT - Germany. Placement of 10-year government bonds;
USA. President's Day

Tuesday, February 19
10:30 GMT - United Kingdom. ILO unemployment rate (3m) (December);
10:30 GMT - United Kingdom. Average salary excluding bonuses (3m / g) (December);
10:30 GMT - United Kingdom. Applications for unemployment benefits (February);
10:00 GMT - Germany. Sentiment index in the business environment of the ZEW Institute;
10:00 GMT - Germany. The index of assessment of the current economic conditions of the ZEW Institute;
10:00 GMT - Eurozone. ZEW Study - Economic Sentiment Index;
10:00 GMT - Eurozone. Production volume in the construction sector;
2:00 GMT - New Zealand. Price index for dairy products.

Wednesday, February 20
23:50 GMT - Japan. Total trade balance;
23:50 GMT - Japan. Import Export;
00:30 GMT - Australia. Salary index;
07:00 GMT - Germany. Producer Price Index;
13:55 GMT - United States. Redbook Retail Sales Index;
19:00 GMT - United States. Minutes of the meeting of the Federal Reserve Committee of the US Federal Reserve.

Thursday February 21
23:50 GMT - Japan. Foreign investment in Japanese stocks;
00:30 GMT - Australia. Unemployment rate;
00:30 GMT - Australia. Employment rate;
07:00 GMT - Germany. Harmonized consumer price index;
07:00 GMT - Germany. Consumer price index;
08:30 GMT - Germany. Markit Manufacturing PMI;
08:30 GMT - Germany. Markit Business Index;
09:00 GMT - Eurozone. Composite index of business activity in the manufacturing sector Markit;
09:00 GMT - Eurozone. Markit Business Index;
13:30 GMT - United States. Primary applications for unemployment benefits;
13:30 GMT - United States. Orders for durable goods;
14:45 GMT - United States. Markit PMI in the manufacturing sector.

Friday, February 22
23:30 GMT - Japan. National Consumer Price Index;
07:00 GMT - Germany. Final non-seasonal GDP;
07:00 GMT - Germany. Gross domestic product;
10:00 GMT - Eurozone. Basic CPI;
10:00 GMT - Eurozone. Consumer price index;
13:30 GMT - Canada. Retail sales.

Author: Anthony Porter, IAFT Analyst

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