This past week, the US Dollar[1] saw some strength against its major peers as it outperformed the Euro[2], Australian Dollar[3] and New Zealand Dollar[4]. EUR/USD[5] particularly sold off as disappointing Eurozone PMIs crossed the wires into the end of the week. Meanwhile, coronavirus cases in Germany continued to rise.
Global market sentiment was somewhat mixed, the Dow Jones Industrial Average[6] trailed the tech-heavy Nasdaq[7] Composite. Equities and anti-fiat gold prices[8] temporarily sold off as FOMC[9] minutes poured cold water on yield curve control (YCC) expectations. At the same time, the largest weekly gain in the Fed’s balance sheet since early June pushed its total asset holdings above US$7 trillion.
Financial markets are eyeing a couple of event risk in the week ahead. The Federal Reserve will be hosting the annual Economic Policy Symposium which will be live streamed this year. Similar commentary that echoes the FOMC minutes about the outlook for growth and YCC could risk denting market mood, perhaps boosting the anti-risk US Dollar and Japanese Yen[10].
The Republican National Convention could also stir volatility if President Donald Trump focuses on foreign policy[11]. US Conference Board Consumer Confidence will also be closely watched, a rosy outcome could boost the S&P 500[12]. The Canadian Dollar[13] will be eyeing local GDP data. What else are traders looking out for in the week ahead?
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Fundamental Forecasts:
US Dollar Decline May Accelerate After Jackson Hole Symposium[15]
Selling pressure in the US Dollar may swell if
