Trader, analyst and instructor with a 6-year experience

US Dollar: forecast for May 30 - June 5

Traders’ eyes all over the world are glued to the US Dollar these days: are we now entering a new phase of the greenback’s strength? Do we need to prepare ourselves for the new shocks on global markets?

Last week we’ve seen a bunch of upbeat US data: US durable goods orders surged in April on increased transportation demand, while the pending home sales reached their highest level in almost a year. We see that the US economic fundamentals are quite sustainable, so the major question is now about the rate expectations.

Big names of the US officials are standing in line to warn that a rate hike is coming in the nearest future. The Fed’s member Powell joined the party last week. The market is now quickly repricing the number of rate hikes in 2016 – the chance is rising from 1 to 2 or 3 hikes.

US economic calendar for the new week is very active. On Monday, markets will be closed due to a bank holiday. On Tuesday, we’ll watch the personal spending figures and consumer confidence index. On Thursday, apart from the OPCE meeting, we’ll be watching an ADP NFP and unemployment claims, while on Friday markets will focus on the official labor market figures. In April the US economy added only 160K new jobs, but the wage inflation showed some signs of rising. May NFP consensus is seen at 163K. A better reading will clearly trigger a rally of the US currency.

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