The U.S. Dollar experienced a bit of a revival last week and according to the Bloomberg Dollar Spot Index, the buck strengthened by 1.25% against its ten major counterparts.
It seems like throughout this week there will be plenty in the form of data to test the rally, especially with Gross Domestic Product on Wednesday. We also shall see if Tuesday creates any headlines as new Fed head Jerome Powell speaks to a House Panel on Tuesday about the state of the economy.
The swings across markets will likely continue and with indicators hitting the wire from multiple regions, there will be plenty to digest. NAFTA could also come into play this week as officials try to improve the tone of revamp talks. Fears over the economic effects of possible abandonment of the pact have affected the Canadian Dollar the most, which fell by 1.5% last week after also experiencing terrible sales figures.
The Euro may be in for another interesting week as the U.S. Dollar’s recovery may continue if economic data impresses. Additionally, there will be some drama as German Socialist Democrats gather to vote on cooperating with Angela Merkel.
We will closely monitor any headlines that may negatively impact the shared currency as it pertains to the upcoming general elections in Italy on March 4th. The votes could reveal a lot about the political climate and whether major changes will come through alternative party movements.
The Pound has neither managed to strengthen nor weaken in the past week and a half as forward momentum has met downward moves, creating a U-shaped graph for the currency. Brexit will have a deciding day on Friday when Prime Minister Theresa May is expected to give an important speech on her vision for the transition and what type of relationship will be fostered.
It would not be surprising to see swings in the next few days that suddenly come from random statements as EU lawmaking heads will have plenty, and have had, plenty to say about their disappointment with the lack of clarity in vision. The UK has not been cohesive.