The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now.
Important events this week will bring us
The outbreak of coronavirus widens
During the weekend, the number of confirmed cases of coronavirus rose to 17,390 people. The virus continues to affect the market as companies close their offices and ban transportation to China. The situation pulls the risky assets down and strengthens safe-haven assets. We may expect the risk-off sentiment to continue dominating in the market until positive news on the vaccine comes out.
RBA: will it cut the rate?
The Reserve Bank of Australia will publish its monetary policy statement and announce the decision on the interest rate on February 4 at 05:30 MT time. The main question in all the analysts’ minds is whether the RBA will lower the current 0.75% interest rate? As the coronavirus outbreak continues to affect the market, it will be interesting to see how the regulator is going to act amid the given circumstances. Let’s not forget that Australia is one of close China's trade partners. Also, analysts keep reminding about below-the-target inflation and a high unemployment rate, which may be taken into central bank’s consideration while assessing the chances of more easing. All in all, if the rate cut happens, the AUD will slide. On the contrary, if the interest rate remains stable, the AUD will rise.
Job data of New Zealand
The next big event this Tuesday is the employment change and unemployment rate of New Zealand at 23:45 MT time. The forecasts are quite optimistic, as the market expects the employment change to advance by 0.3% and the unemployment rate to remain at the same level of 4.2%. If the actual level of employment change is higher, and the unemployment rate is lower than the forecasts, the NZD will strengthen.
First Friday of the month, you know what that means
The United States will publish non-farm payrolls (NFP), alongside with average hourly earnings and unemployment rate on February 7, at 15:30 MT time. As you know, this data makes the USD very volatile after the release. Analysts’ forecasts are positive. They anticipate the non-farm payrolls to increase by 160K, and average hourly earnings to advance by 0.3%. At the same time, the unemployment rate is forecast to remain at 3.5%. The higher NFP and average hourly earnings and the lower unemployment rate will be appreciated by the bulls.
OPEC+ calls for an emergency meeting
The crush of oil prices to the fresh lows amid coronavirus panic provoked OPEC+ for an immediate response. The alliance is now planning an emergency meeting on February 8-9 or February 14-15 to discuss more output cuts in order to support the oil prices.
Want more news? Stay updated with us!
On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies.
Happy Wednesday, traders! We went through the Internet and found the best news for you, take a look!
This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.
The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.