Forecasting the Coming Week: The FOMC Minutes take centre stage

Another week where bets on the potential timing of interest rate cuts by the Federal Reserve dominated the headlines in the FX universe. Against that backdrop, the Greenback climbed to fresh 2024 highs, while EUR/USD retreated below 1.0700 to print a new YTD bottom.

Let's start with the US docket. Markets will be closed on Monday due to the "President's Day" holiday. The CB Leading Index comes on February 20, while the release of the FOMC Minutes are due on February 21. Moving forward, February 22 will see the Chicago Fed National Activity Index, flash PMIs and Existing Home Sales. The USD Index (DXY) experienced a loss of momentum in the latter part of the week after hitting fresh 2024 peaks near the 105.00 barrier, although the knee-jerk was insufficient to halt the multi-week positive streak.

A pretty dull calendar for the euro bloc will see the flash Consumer Confidence gauge on February 21 ahead of preliminary PMIs in Germany and the euro area and the final Inflation Rate in the broader euro zone on February 22. Finally, Germany's IFO Business Climate and the final Q4 GDP Growth Rate are due on February 23. Despite sinking to the sub-1.0700 region earlier in the week, EUR/USD managed to regain balance and end the week with marginal gains.

In the UK, Public Sector finances are due on February 21 followed by advanced PMIs on February 22. The Gfk Consumer Confidence will close the docket on February 23. GBP/USD sparked quite a marked recovery in the second half of the week, trespassing the 1.2600 hurdle to end the week almost unchanged.

A light week ahead data-wise in Japan, as Machinery Orders are due on February 19, seconded by the Reuters Tankan Index and Balance of Trade figures on February 21, while weekly readings from Foreign Bond Investment are due on February 22. USD/JPY resumed the uptrend on Friday and clinched its third straight week of gains following new yearly peaks near the 151.00 milestone (February 13).

In Oz, the RBA Minutes will take centre stage on February 20, prior to Westpac's Leading Index, the Wage Price Index and flash PMIs on February 21. AUD/USD managed well to reverse Tuesday's deep pullback to YTD new lows, advancing in the subsequent three sessions to close its second week in a row with gains.

The Chinese data space offers the preliminary Q4 Current Account figures on February 18, while the House Price Index and FDI (YTD) readings are due on February 23.

Anticipating Economic Perspectives: Voices on the Horizon

• Fed's R. Bostic and M. Bowman speak on February 21 along with BoE's S. Dhingra and ECB's J. Nagel.
• Fed's P. Jefferson, P. Harker, N. Kashkari and L. Cook are all speaking on February 22, as well as BoE's M. Greene.
• On February 23, Fed's C. Waller and ECB's I. Schnabel and J. Nagel are also speaking.

Central Banks: Upcoming Meetings to Shape Monetary Policies

• The People's Bank of China (PBoC) is expected to reduce its 1-Year and 5-Year LPR by 10 bps on February 20.
• The Bank Indonesia (BI) is seen holding its benchmark interest rate unchanged at 6.00% on February 21.
• No changes are expected by the Bank of Korea (BoK) on February 22, leaving its policy rate intact at 3.50%.