The USD is Under Sale Again (Weekly Review)

In anticipation of the speech of the US Fed Governor Jerome Powell, the USD tried to develop upward dynamics against a number of its main competitors. Due to the relatively low market activity, instead of developing a large-scale correction, it, having slightly retraced, entered a correction phase and was traded mainly in ranges.

Jerome Powell's speech turned out to be rather bearish for the USD, as it did not give the bulls any hope for an imminent monetary tightening. So the USD, having undergone major sales, closed the week with a decline against the EUR, the GBP, and the CHF. The pressure on the USD may continue until the release of non-farms, but bears should still be extremely careful.

Paired with the JPY, the USD showed a positive attitude until the news of the resignation of the Japanese prime minister was released. Political uncertainty may be a reason for Japanese exporters to return revenue, so the JPY was bought out on the decline, thanks to which the pair closed the week near 105.00. However, the next prime minister, most likely, will also adhere to an ultra-soft monetary policy, so the JPY growth is unlikely to be sustainable.

Schedule for this week:

Monday, August 31
12:00 GMT - Germany. Harmonised Index of Consumer Prices (HICP);
12:00 GMT - Germany. Consumer Price Index (CPI);
12:30 GMT - Canada. Building Permits.

Tuesday, September 1
22:30 GMT - Australia. AIG Manufacturing Index;
23:00 GMT - Australia. Commonwealth Bank Manufacturing Purchasing Managers Index (PMI);
01:45 GMT - PRC. Caixin Manufacturing Purchasing Managers Index (PMI);
04:30 GMT - Australia. Reserve Bank of Australia (RBA) Interest Rate Decision;
04:30 GMT - Australia. Reserve Bank of Australia (RBA) Rate Statement;
07:55 GMT - Germany. Markit Manufacturing Purchasing Managers Index (PMI);
07:55 GMT - Germany. Unemployment Rate;
07:55 GMT - Germany. Unemployment Change;
09:00 GMT - Eurozone. Core Consumer Price Index (CPI);
09:00 GMT - Eurozone. Consumer Price Index (CPI);
09:00 GMT - Eurozone. Unemployment Rate;
13:45 GMT - USA. Markit Manufacturing Purchasing Managers Index (PMI);
14:00 GMT - USA. ISM Manufacturing Purchasing Managers Index (PMI).

Wednesday, September 2
01:30 GMT - Australia. GDP;
06:00 GMT - Germany. Retail Sales;
12:15 GMT - USA. ADP Nonfarm Employment Change;
13:30 GMT — United Kingdom. Inflation Report Hearings;
14:00 GMT - USA. Factory Orders.

Thursday, September 3
22:30 GMT - Australia. AiG Construction Index;
01:30 GMT - Australia. Trade Balance;
01:45 GMT - PRC. Caixin Services Purchasing Managers Index (PMI);
06:30 GMT - Switzerland. Consumer Price Index (CPI);
09:00 GMT - Eurozone. Retail Sales;
14:00 GMT - USA. ISM Services Purchasing Managers Index (PMI).

Friday, September 4
00:30 GMT - Australia. Retail Sales;
12:30 GMT - Canada. Unemployment Rate;
12:30 GMT - Canada. Employment Change;
12:30 GMT - USA. Nonfarm Payrolls;
12:30 GMT - USA. Unemployment Rate;
12:30 GMT - USA. Average Hourly Earnings;
12:30 GMT - USA. Participation Rate.

Author: Anthony Porter, IAFT Analyst