Last week the US Dollar extended the upside for a second week in a row, supported by the strong USD figures. According to the second estimate, the US economy rose by 1% in Q4. What’s more, personal spending and durable goods orders have also shown significant improvement.
US dollar index recovered above 98 pips and remains in a bullish channel. Market gained 61.8% Fibonacci from the early 2016 drop in the recent two weeks. Are the bulls retaking control over the market?
It’s all not so easy. We have to watch the new range of the economic data on the new week. Strong figures could raise expectations for a Fed’s rate hike in March and boost the US currency. Weak data will disappoint and cap the USD upside.
Watch the US manufacturing PMI on Tuesday (forecast – upbeat) and the non-manufacturing PMI on Thursday (forecast – downbeat). On Friday, the markets will focus on the labor market figures. NFP is expected to come at 195K in February (up from the January reading). However, average hourly earnings figure could become a negative factor for the greenback – growth is expected to have slowed to 0.2%.