Last week we observed an impressive rally of the US dollar: USD index recovered more than 50% from the Fed-induced selloff. US representatives were unanimous in the past couple of days, underlining the need to raise interest rates as soon as possible.
As a result, investors switched to buying the US dollar ahead of the April 27th meeting. However, the futures market is now pricing in only a 12% chance for an April hike and a 40% chance for a June hike. Strong data releases on the coming week could strengthen the USD demand more significantly, turning the market into the risk-off mood.
Get ready for another intense week on Forex. On Monday, US personal consumption data will be released. The Fed’s chief Janet Yellen will deliver a speech in the New York Economic club on Tuesday. On Wednesday, watch the preliminary NFP from ADP. Official February labor market figures will be released on Friday.