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US Dollar: forecast for May 23-29

The FOMC minutes released on Wednesday changed the market attitude to the greenback. The document revealed that the Fed’s members were discussing the June rate hike on their April meeting.

Combined with the hawkish officials’ comments and improved US economic data, all that increased the market expectations for a June hike from 4% to 30%. We still believe that the Fed’s hike is unlikely in June, but comments the press-conference could easily deliver hawkish comments. These expectations are likely to push the greenback higher in the coming weeks.

On the new week watch the April durable goods orders on Thursday. Orders for items meant to last at least three years rose by 1.3% in March after a 3.1% drop in February. On Friday we’ll focus on the preliminary Q1 GDP. The advance reading showed a 0.5% growth in the first three months of 2016. Economists believe that the reading could be revised to the upside.

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