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Market Outlook

USD recuperates to end losing spate. What’s ahead?

The past week got over with the USD increasing on Friday after the US jobs figures signalled that employment and income growth were positive in January, paving the way for swifter rate increase by the Fed this year.

The US economy 200K jobs in January and more importantly, saw income grow by 2.9% y/y. This boosted the dollar after a week of struggle. The U.S. dollar index climbed up 0.63% to 89.04 in subsequent trade.

Yellen’s final Fed verdict saw very understated alterations to the statement no rate hike. These modifications were a tad hawkish but the USD’s reaction was only slight. Euro-zone core inflation jumped to 1% as projected while UK PMIs was against predictions. Australian inflation was somewhat below anticipation while Canada’s GDP bounced to rise 0.4%.

Gold prices fell on Friday as the USD bounced back following the latest U.S. jobs figures. Gold futures for April delivery dropped 0.91% at $1,335.70 on the Comex division of the New York Mercantile Exchange. For the week, prices dropped 1.47%.

In the coming week, investors will watch out for any developments from Washington over the country’s finances before the Feb. 8 spending deadline.

In what is likely to be a comparatively quiet week on the economic calendar, investors’ focus will mainly be directed towards central bank meetings in the UK, Australia and New Zealand.

The Bank of England (BoE) will announce its rate decision at 1200GMT (7:00AM ET) on Thursday along with its quarterly inflation report.

China is to put out its January trade data at around 0300GMT on Thursday. The report will purportedly indicate that the country’s trade surplus slackened a bit to $54.0 billion the previous month from an excess of around $54.7 billion in December. China's economy grew 6.8% in the fourth-quarter from a year before, spurred by development in the industrial sector, a burgeoning property market and robust exports.

The week will end with Canada issuing the January employment statistics at 8:30AM ET (1330GMT) on Friday.