What to look for around USD

Price action around the index shows some weakness and forces the dollar to retreat to the 102.00 zone on Wednesday, all in response to the rejection from Monday’s tops near 102.80.

The recent marked recovery in the dollar has been underpinned by the loss of momentum in the view that the Federal Reserve could make an impasse in its current tightening bias in May, which has been also propped up by persevering disinflation, nascent weakness in some key fundamentals and fresh concerns surrounding the banking sector

Key events in the US this week: MBA Mortgage Applications, Inflation Rate, Monthly Budget Statement, FOMC Minutes (Wednesday) – Producer Prices, Initial Jobless Claims (Thursday) – Retail Sales, Industrial Production, Advanced Michigan Consumer Sentiment, Business Inventories (Friday).

Eminent issues on the back boiler: Persistent debate over a soft/hard landing of the US economy. Terminal Interest rate near the peak vs. speculation of rate cuts in 2024. Fed’s pivot. Geopolitical effervescence vs. Russia and China. US-China trade conflict.