The past week was significant in terms of news events for the US dollar. At the beginning of the week, with the release of weaker-than-expected data for currencies, especially the Chicago PMI data and also Thursday's ISM Manufacturing PMI data, recession fear seized the market, as mentioned earlier, during recession fear, the US dollar can be considered a safe asset, which traders will buy dollars as a result. As the dollar strengthens in the market, symbols such as gold, stock indices such as Dow Jones and Nasdaq, and the USDJPY will take a downward trend. While the EURUSD, GBPUSD symbols, and ten-year bonds will rise.
On Wednesday, Fed chairman Powell responded to the market's expectations as "the Federal Reserve may soon slow down the interest rate increase at the December meeting" in his speech. Also, he reduced the pace of hawkish policies (Rapid increase in interest rates) and strengthened Dovish policy. As a result, the dollar became very weak, and gold entered the $1,800 track with rapid and strong growth. Stocks and stock market indices experienced a good rise, and the dollar became very weak in currency pairs.Therefore, the market concluded the dollar's weakness from the Fed chairman's speech. And considering the Federal Reserve members' silence, this process can continue until the December 15 meeting.To continue the dollar's downward trend or stop it, one should not ignore the important data, including the inflation rate (CPI) that will publish in the future.
On Friday, with the release of excellent data in the US non-farm payrolls (NFP) report (forecast: 200,000 | real: 263,000), the US dollar strengthened, and at the release's initial moment, gold fell from 1,800 to 1,780 by $20, other symbols also made sharp movements.
The rapid rise of the dollar in the data release's first moments was due to the fact that, contrary to Mr. Powell's statement, the Federal Reserve, due to being data-driven, might not decide to reduce the interest rate hike.But after the early hours' rapid fluctuating moves, until the weekend holiday, the market recovered all the initial movements caused by the news, and the dollar weakened again.
There is not a lot of news traffic for a particular currency in the economic calendar in the coming week. There are some important data or events, approx for most currencies, that we will review below.
On Monday, December 5 at 03 pm(UTC), the PMI index of the non-manufacturing sector (ISM institute report) (previously: 54.4 | forecast: 53.1) will publish, which will affect the dollar's strength.
Note that if this index is published much lower than expected, the recession fear may dominate the market again, and the dollar will play a safe asset role.
Other important data for the US dollar are the core producer price index (Core PPI) (previously: 0.0% | forecast: 0.2%) and the producer price index (PPI) (previous: 0.2%) | forecast: 0.2% ), will publish on Friday, December 9 at 1:30 pm. It is important to note that if this data is higher than the forecast, it is one of the inflation growth signs, resulting in the market seeking to strengthen the dollar.
Also, we should pay attention to the Michigan University data for the dollar, which will publish on Friday. These data can be a guiding light to check the "recession fear." If this data is published very weakly, it will have the power to attract the market's opinion.
The central bank's interest rate will be set at 3 pm on Wednesday for the Canadian dollar. It is expected that the central bank of Canada will increase the interest rate of this country by 0.5% from 3.75% to 4.25%. Also, this central bank's statement will be published at the same time, which can have important points about Canadian monetary policies and bring good fluctuations to the currency pairs with the Canadian dollar on one side. We should also consider that Canada's central bank started reducing the interest rate increase faster than other banks. If this continues, the Canadian dollar can be under good selling pressure.
The central bank's interest rate for the Australian dollar will be set on Tuesday at 3:30 am. It is expected that the central bank of Australia will increase the interest rate of this country by 0.25% from 2.85% to 3.10%. This central bank's statement will publish at the same time, which can have important points about Australian monetary policies and bring good fluctuations to the currency pairs with the Australian dollar on one side. Also, at 12:30 am on Wednesday, the Gross Domestic Product (GDP) for the third quarter will be published.
On Monday, the PMI index for various sectors in the eurozone countries will be published for the eurozone.
On Monday at 9:30 am, the composite PMI index and the UK service sector for the pound will publish.