Dollar May Have Weakened Enough For Now
"Financial markets have been pricing in a 50bp lower Fed terminal interest rate for over a month. That may be enough for now, barring some surprise weakness in US JOLTS job openings data (Tuesday) or a big rise in weekly initial jobless claims data (Thursday). Indeed, Federal Reserve Chairman Jay Powell was fairly upbeat about recent developments in his speech on Friday. "One takeaway was his comment that sentiment is not a good predictor of consumption growth - suggesting it may be too early to call a US consumer crisis. This week also sees February CPI data on Wednesday, with core interest rates expected to hold steady at 0.3% month-on-month.
This all supports Powell's conclusion on Friday that the Fed is in no rush to cut rates and could cool market pricing for a 27bp rate cut in June." "It is also worth noting that the US has now switched to Daylight Savings Time, narrowing the time gap with Europe on March 30.
Aside from US data this week, focus will be on Ukraine peace talks in Saudi Arabia and the global trade war. The DXY is likely to consolidate after a tumultuous week, although selling interest may return to 104.30/50 as the European session continues to see price action."
Source: FXStreet
