Let's look at the news event's we've got lining up this week...
The ISM (Institute for Supply Management) Services PMI (Purchasing Managers Index) measures the level of a diffusion index, based on surveyed purchasing managers, excluding the manufacturing industry. It is a leading indicator of economic health; businesses react quickly to market conditions and their purchasing managers hold the most current and relevant insight into the company's view of the economy.
Analysts are expecting the services PMI to come out at 63.9, so just 0.01 less than the previous reading. It's not a major difference, and still above the 50.0 threshold; however this reading does indicate contraction and if the report comes out as expected, could see slight bearishness for the USD. However, I'm not expecting much volatility to come out from this report.
The June Fed meeting seemed a lot more hawkish than expected, as inflation estimates were upgraded and the dot plot forecast of rates suggested a potentially earlier rate hike. Fed Chair Powell quickly downplayed the pickup in price pressures during his speech the next day, suggesting that there is still a divide amongst FOMC members.
The transcript of their meeting would contain these internal discussions, which should provide more insight on how most policymakers are leaning.
Clearly the rush in the US isn't over and the release of the FOMC minutes might still spark big USD moves.
After consecutive employment data disappointments, Canada is projected to report a comeback of around 40k in hiring in June, following a -68k headline last month. This should be just enough to bring the unemployment rate down from 8.2% to 8.1%.
However, if the results come out worse than expected, another bad figure might lead CAD traders to worry that The BoC tapered way too soon or that it would take much longer before they tighten policy.
9/17/2021 Stocks are down -0.58% this morning after coming down to test a significant level of support once again. While stocks fall, the dollar rises in the anticipation of sooner-than-expected tapering by the Fed along with a hike in interest rates starting in 2022. Our outlook Other than September being one of the worst months […]
9/16/2021 The Euro-Dollar pair is down over 0.5% today after several days in the red. Today's speech by EU president Lagarde mentioned how the economic recovery had come quicker than expected six months ago. This was praised by the prompt vaccine distribution so citizens could get back to work. Across the pond, the US just […]
9/14/2021 This morning's report on CPI m/m and core CPI m/m came in at a lower percentage than expected which resulted in a falling dollar pre-New York session. The USD is now volatile under the uncertainty of potential tapering and rising rates while the equities market seems to be rising because of this. Our outlook […]
9/13/2021 Big money has been moving out of Australia's currency for nearly a month now which has been the biggest drop in long contracts in this amount of time year-to-date. Australia's dollar index (AXY) is up 0.06% at 73.61 on the day after rebounding from the lows around 71.19. Our outlook Australia's economy has surprised […]