Forecasting the upcoming week: Enter Powell and US CPI data

Despite a resurgence of optimism in the latter half of the week, the Greenback was unable to reverse its weekly pullback. Meanwhile, tariff headlines, caution from Fed policymakers, and the upcoming release of US CPI data—along with Powell’s testimonies—are expected to keep the currency’s volatility unchanged in the short term.

The US Dollar Index (DXY) traded with modest losses this week, always swinging around the tariffs narrative and some late recovery in US yields across the speactrum. The NFIB Business Optmism Index is due on February 11, ahead of the weekly Mortgage Applications by MBA, and the key Inflation Rate followed by the EIA’s weekly report on US crude oil inventories on February 12. On February 13, the usual weekly Initial Jobless Claims wil be published along with Producer Prices. Retail Sales will take centre stage on February 14, prior to Import/Export Prices, Industrial and Manufacturing Production, Business Inventories, and Capacity Utilization.

EUR/USD retreated for the second week in a row amid fears of tariffs on the European Union and the acceptable recovery in the Greenback towards the end of the week. The EMU’s Investor Confidence tracked by the Sentix Index is due on February 10. Germany’s final Inflation Rate will be released on February 13, along with the Industrial Production in the euro area. Wholesale Prices in Germany are expected on February 14, followed by another estimate of Q4 GDP Growth Rate and the advanced Q4 Employment Change in the euro bloc.

GBP/USD managed to close the week with decent gains despite the BoE’s slashed its policy rate by 25 bps amid a dovish tone at its gathering. The BRC Retail Sales Monitor is due on February 11. On February 13 comes the RICS House Price Balance along with the preliminary Q4 GDP Growth Rate, Business Investment, Goods Trade Balance, Industrial and Manufacturing Production, Construction Output, and the NIESR Monthly GDP Tracker. d

USD/JPY maintained its downards bias well in place, down for the fourth week in a row amid rising speculation of further tightening by the BoJ in the next few months. The Current Account results are due on February 10, seconded by Bank Lending figures and the Eco Watchers Survey. Machine Tools Orders are due on February 12, while Producer Prices are expected on February 13. The weekly Foreign Bond Investment prints will close the docket on February 14.

AUD/USD managed to reverse Monday’s deep pullback and ended the week with marked gains. A move above the 0.6300 hurdle, however, remained elusive. The final prints of Building Permits and Private House Approvals are due on February 10. The Westpac Consumer Confidence gauge is expected on February 11, seconded by the Business Confidence print by NAB. On February 12, Home Loans and Investment Lending for Homes will be released, while the Melbourne Institute will publish its Consumer Inflation Expectations on February 14.

Anticipating Economic Perspectives: Voices on the Horizon

• The Fed’s Hammack, Williams and Powell speak on February 11,along with speeches by the BoE’s Mann and Bailey.
• The Fed’s Bostic and Powell, followed by the ECB’s Nagel and the BoE’s Greene will all speak on February 12.
• The ECB’s Nagel is due to speak on February 13.