The Dollar index recovered to 96.142 last Friday from its low of 94.578 on 18 Mar, due to renewed Fed hike expectations.
Many of Fed officials speaking this week will be looking for evidence for inflation to return to 2% and for stronger employment to boost wages. The first speakers tomorrow are Fed Chair Janet Yellen and Fed Presidents John Williams (San Francisco) and Robert Kaplan (Dallas). Charles Evans (Chicago) will speak Wednesday. On Friday, William Dudley (New York) will be focusing on financial crisis. The data and comments (especially those from Yellen, Dudley and Williams) will shape expectations on whether the Fed will hike at its next FOMC meeting on 27 Apr. If so, the DXY (USD) index has scope to return higher to the 97.871 close seen on the first Fed hike on 16 Dec.
The key US data to watch are today’s US PCE deflators and Friday’s monthly jobs data. Consensus expects core PCE deflator to rise to 1.8% (YoY) in Feb15 from 1.7% in the previous month. Nonfarm payrolls are expected to stay above the 200K mark for a second straight month in Feb15, while the unemployment rate remains below 5% for a third consecutive month.
The material has been provided by InstaForex Company – www.instaforex.com