Last week, the dollar was trading higher earlier the week, however, lost all of its gains and traded lower, with the DXY index closed below 91.00 as investors optimistic about global economic recovery.
For the coming week, investors will be focusing on some progress on the $1.9 trillion relief package from the US. Also, investors will eagerly be awaiting semi-annual monetary policy testimony from Fed Chair Powell on Tuesday.
Last week, EUR/USD was trading higher amid stronger manufacturing activity in Germany and the Eurozone.
For the coming week, German Ifo for February is expected to jump amid stronger ZEW sentiment and PMI in German.
Last week, the GBP/USD traded above 1.40 for the first time since April 2018, helped by hopes that the UK could ease lockdowns sooner than expected due to the country’s fast deployment of Covid-19 vaccines.
For the coming week, investors are waiting for UK Prime Minister Boris Johnson’s speech on reopening the economy on Monday. Also, the unemployment rate in the UK is expected to improve.
Last week, NZD/USD surged to a fresh high which is last seen in March 2018 as investors optimistic about global economic recovery.
The first batch of Covid-19 vaccines has been administered at the Auckland quarantine facility, marking the “beginning of the end of the pandemic in New Zealand”.
For the coming week, RBNZ is set to release its rate statement. The bank is looking at an even brighter domestic picture as the activity in New Zealand is practically above the pre-pandemic levels and inflation at 1.4% is much closer to the central bank target’s mid-point of 2%.
Last week, the Canadian dollar closed higher, with USD/CAD traded at 1.2610 despite a slide in oil prices.
For the coming week, USD/CAD is expected to move below 1.2600, mostly driven by global recovery and USD weakness. However, investors will keep an eye on the speech by BoC Governor Tiff Macklem.
Last week, the Australian dollar was the best performing currency amid a broad risk-on tone and a jumped in iron ore prices.
For the coming week, investors will continue to monitor iron ore prices, global recovery, and US fiscal stimulus.
Last week, the Japanese Yen has been pressured by a positive risk environment and large rises in US yields.
For the coming week, the ongoing US fiscal stimulus and the vaccine rollout likely to give more pressure on the JPY, although the analysts suspect that Washington wants a weaker dollar this year to avoid all the US stimulus checks being spent on imports.
Last week, the Swiss Franc declined, responding to some better news in Italian politics and amid a positive risk environment.
For the coming week, the analysts expect the ongoing US fiscal stimulus, global recovery, and vaccine rollout will be a key driver to CHF.
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