People calling for a rally of the US dollar again got disappointed as USD bears got aggressive with every piece of USD-negative economic data that came in. The Reuters/University of Michigan index of consumer sentiment fell to a 16-year low, and consumer spending rose 0.1% in February, the least in more than a year, after a 0.4% gain in January. Weakness in the greenback is most prominent against the Euro; EUR/USD gained the most in more than two years last week, rallying more than 500 pips, with most gains made over last Tuesday and Wednesday. If EUR/USD breaks above its all-time high of 1.5900, it could next target 1.5950, 1.5990-1.6000.

Contraction of US Economy?

An increasing number of economists are predicting a US recession as job, retail sales and manufacturing data have worsened this year. Theoretically, to qualify as a recession, the economy has to shrink for six straight months. Traders are pricing in a 52% chance the Fed will cut its target rate by a quarter-point to 2% at its meeting on April 30, and the remaining bets are for a half-point cut.

There will be many major economic releases this week, including US ISM manufacturing on Tuesday and US non-farm payrolls on Friday.

Watch the video below:

Sunday:

Japan industrial production 2350 GMT

Monday:

NBNZ business confidence 0300 GMT

Eurozone CPI, consumer confidence, business climate 0900 GMT

UK Gfk consumer confidence 0930 GMT

Canada GDP 1230 GMT

Chicago PMI 1345 GMT

Japan Tankan survey 2350 GMT

Posted in Categories: Economy, Forex, Videos.

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