USD stabilises but calm will be tested by trifecta of economic data this week

Matthew Ryan, CFA Ebury

The dollar has stabilised after a rocky start to the year, as tariffs and institutional degradation continue to make hedging dollar risks the path of least resistance for foreign asset managers.

However, economic data has been holding up well and markets have taken in stride the appointment of Trump's political ally Warsh to replace Powell, who we continue to see as probably the least bad option to take over as FOMC chief.

Recent volatility and churn in equity and crypto markets have had little impact on currency and bond markets. This calm will be tested this week by a trifecta of high stakes economic releases that seldom coincide: retail sales on Tuesday, the January labour market report on Wednesday, and January inflation to cap the week on Friday.

Author

Matthew Ryan, CFA

Ebury

Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.

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