Forecasting the upcoming week: Nonfarm Payrolls and Fedspeak take centre stage

The Greenback managed to resume its weekly uptrend following shifting developments around President Trump’s tariffs plans, while the hawkish hold by the Federal Reserve at its January 29 gathering also added to the uptrend.

The US Dollar Index (DXY) rebounded this week, breaking its two-week losing streak as it carved out a volatile yet upward trajectory. The Greenback's recovery comes amid lingering uncertainty over Trump's trade policies and the Federal Reserve's persistently cautious tone, fueling mixed market sentiment.The ISM Manufacturing PMI will be the salient event on February 3, seconded by Construction Spending, and the final print of the S&P Global Manufacturing PMI. The JOLTs Job Openings follows on February 4 ahead of Factory Orders and the RCM/TIPP Economic Optimism Index. On February 5 comes the weekly Mortgage Applications by MBA, the ADP Employment Change report, the ISM Services PMI, and the final S&P Global Services PMI. Challenger Job Cuts and the weekly Initial Jobless Claims wil be published on February 6, prior to the key Nonfarm Payrolls and the preliminary Michigan Consumer Sentiment, both expected on February 7.

EUR/USD rebounded from weekly lows near 1.0360 on Friday, snapping a four-day losing streak. The pair found renewed support as the US Dollar lost some of its bullish momentum, giving the Euro a chance to recover. The final HCOB Manufacturing PMI in Germany and the euro bloc are expected on February 3, seconded by the advanced Inflation Rate in the euro zone. The final HCOB Services PMIs in the euro bloc and Germany will be released on February 5, along with Producer Prices in the broader euro region. In addition, Factory Orders in Germany, and the HCOB Construction PMI in Germany and the euro area are due on February 6. Closing the week, Germany’s Balance of Trade results and Industrial Production are due.

GBP/USD delivered a choppy performance this week, ultimately settling with marginal losses on the weekly chart. Cable struggled to build on the strong gains of the previous week, as shifting market sentiment and USD dynamics kept its momentum in check. The final S&P Global Manufacturing and Services PMIs are due on February 3 and February 5, respectively. The BoE meeting will take centre stage on February 6, prior to the Halifax House Price Index and the BBA Mortgage Rate, both expected on February 7.

USD/JPY extended its bearish momentum, marking a third straight week of declines as the Japanese yen gained strength. The currency's appreciation was fueled by persistent speculation of further tightening by the BoJ, keeping pressure firmly on the pair. The BoJ Summary of Opinions will kickstart the week on February 3, along with the final Jibun Bank Manufacturing PMI. Average Cash Earnings will come on February 5, followed by the final Jibun Bank Services PMI. On February 6 will come the weekly Foreign Bond Investment figures, while Household Spending and the preliminary Coinciden Index and Leading Economic Index are expected on February 7.

Although AUD/USD regained some momentum on Friday, it wasn't enough to salvage the week, ending in negative territory. This marked the end of a two-week winning streak, as bearish pressures ultimately overshadowed the late recovery. Building Permits and Retail Sales are expected on February 3, while the Balance of Trade results are due on February 6.

Anticipating Economic Perspectives: Voices on the Horizon

• The Fed’s Bostic speaks on February 3.
• The Fed’s Musalem, Bostic and Daly will speak on February 4.
• The Fed’s Barkin and Goolsbee are due to speak on February 5.
• The Fed’s Waller and Daly will speak on February 6.
• The BoE’s Pill speaks on February 7.

Central Banks: Upcoming Meetings to Shape Monetary Policies

• The BoE and Banxico will decide on rates on February 6.
• The RBI will meet on February 7.