Last week, the dollar spiked to an eight-month high of 100.19 points dominating the sterling amid unsatisfactory UK data. The deteriorating UK consumer confidence fell to the lowest in six months induced the sell-off of the sterling against the dollar resulting a drop of 0.41% to $1.5040 during the afternoon trading session.
Meanwhile, the dollar-yen pair is consolidating awaiting fresh data from both economies. On Tuesday, the manufacturing PMI is due along with the capital spending indicator and on Friday, average cash earnings from Japan will be published, followed by the consumer confidence.
From the US dollar perspective, the major US data will start on Tuesday, when the manufacturing ISM report is expected. The sub index of employment and prices paid will be watched as well. On Wednesday, the Fed’s Chair Janet Yellen will hold a speech and this will likely cause volatility. Meanwhile, the ADP employment report will be released.
Perhaps the most pivotal number is coming on Friday, when the non-farm payrolls figures, along with the unemployment rate and wage growth will be released. As these are the last labor market data before the FOMC meeting in December, they will be of crucial importance to the markets.
In the meantime, while the market finds it hard to sell the dollar amidst expectation of a December rate hike, it is keeping a close eye on poor performing economies to short against the dollar. The Euro dollar being one of the top choice will be releasing some important figures this week.
On Tuesday, German unemployment change is due, followed by the final manufacturing PMIs from the euro zone. Later in the day, the euro zone unemployment rate is expected as well. Wednesday will bring the CPI figures for the whole euro zone, but the main focus will remain on Thursday’s European Central Bank meeting. The ECB is expected to increase and/or extend its current QE program. Lowering of the deposit rate further into negative territory is possible as well.
Volatility is expected to be elevated during the whole week in the wake of upcoming events.
Top News This Week
USD: ADP Non-Farm Employment Change. Wednesday 2nd December, 9.15pm.
I expect figures to come in at >182K (previous figure was 182K).
USD: Non-Farm Employment Change. Friday 4th December, 9.30pm.
I expect figures to come in at 220K (previous figure was 271K).