Forecasting the upcoming week: It is all about central banks

The Greenback remained on the defensive for the second straight week, this time deepening its sell-off to five-month lows amid persistent concerns surrounding the erratoc trade policy by the Trump’s administration as well as jitters around a potential slowdown in the US economy.

The US Dollar Index (DXY) reached new lows near 103.20, despite US yields managed to regain some balance across the curve. The week kicks in with the release of Retail Sales, along the NY Empire State Manufacturing Index, Business Inventories, and the NAHB Housing Market Index Buildng Permits, Housing Starts, Import and Export Prices, Industrial and Manufacturing Production, and the API’s weekly report on US crude oil inventories will all be published on March 18. The weekly MBA’s Mortgage Applications, Net TIC Flows, and the EIA’s weekly report on US crude oil stockpiles are due on March 19. The usual weekly Initial Jobless Claims are due on March 20, seconded by the Philly Fed Manufacturing Index, Existing Home Sales, and the CB Leading Index.

EUR/USD maintained its march north in place, hitting fresh multi-month peaks around 1.0950 and exposing a probable assault to the key 1.1000 neighbourhood. The ZEW Economic Sentiment in Germany and the euro area is expected on March 18, seconded by Balance of Trade results in the euro zone. The final Inflation Rate in the Euroland will be published on March 19, along with Labour Cost Index, and Wage Growth. Producer Prices in Germany and the Construction Output in the euro area are due on March 20. The EMU’s Current Account prints, and the preliminary Consumer Confidence gauge are expected on March 21.

GBP/USD traded with marked gains this week, surpassing the 1.2900 barrier and refocusing its attention to the psychological 1.3000 threshold. The labour market report will be released on March 20. The GfK Consumer Confidence gauge will come on March 21, ahead of Public Sector Net Borrowing.

USD/JPY reversed part of the previous week’s strong decline and managed to trespass the 149.00 barrier ahead of the key BoJ meeting next week. The Tertiary Industry Index is due on March 18. Balance of Trade, Machinery Orders and final Industrial Production figures are expected on March 19. Japan’s Inflation Rate is due on March 21, along with the Reuters Tankan Index, and weekly Foreign Bond Investment readings.

AUD/USD navigated choppy waters throughout the week, although it closed the second consecutive week of gains, reclaiming at the same time the key 0.6300 mark and beyond. The Westpac Leading Index is expected on March 19, while the labour market report will be released on March 20.

Anticipating economic perspectives: Voices on the horizon

• The RBA’s Hunter will speak on March 18.
• The BoE’s Bailey, and the BoC’s Macklem are due to speak on March 19.
• The Fed’s Williams speaks on March 21.

Central banks: Upcoming meetings to shape monetary policies

• The BoJ and the Fed will meet on March 19.
• The BoE, the SARB, the Riksbank, the SNB, and the PboC will all decide on rates on March 20.