The dollar remained weak, in choppy and volatile trade, on Friday, knocked about by contradictory comments over the preferred direction of the dollar, firstly from Mnuchin and then by Trump. The BOJ’s Kuroda then joined in by surprising traders with some upbeat comments on the Japanese economy, sending the dollar sharply lower. It was a bad week all round for the dollar, falling by an average of around 2% against the other currencies, with the prospect of more to come in the days ahead. Elsewhere, stocks soared again to new all time highs, with the DJI now up 30% since Trump took office. This week will be a big week for US corporate earnings with some of the big names scheduled to release on Wednesday and Thursday. Boeing, Apple, Amazon, Alphabet, Alibaba and Microsoft are all due to report their Q4 earnings. The metals were choppy but rangebound just below last week’s trend highs, while WTI was much the same but looks as though it may want to take another leg higher in the near future.
It is going to be a busy week ahead, with both the FOMC Interest Rate Decision (Wed) and the US Jobs/NFP/Average Hourly Earnings data (Fri), as well as the State of the Union Speech from Donald Trump (Wed). The FOMC meeting will be Janet Yellen’s last, and where a hawkish tone is expected after some recent strong data. With regards to the upcoming employment data, the NFP is expected to rebound to 180k and wages to increase 2.7% yy. There will be plenty more to come this week although today may be relatively rangebound, with little data due (US Personal Consumption/Expenditure) while we await the bigger events later in the week. Tuesday will see the German CPI and the EU Q4 Preliminary GDP, while Wednesday will include the Australian (Q4) and the EU CPI figures (January, Preliminary). Thursday will look to the global Manufacturing PMIs and Friday will focus on the US unemployment data for guidance.
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