Currency Note US Dollar

Busy week of data could intensify US dollar movement

By Ricky Bean May 31st, 2016

Friday was a day with mixed data releases. Investors were hoping for preliminary growth data levels that would spark some encouragement for a possible interest rate hike for June. The figure failed to beat expectations, but remained in the positive territory. Consumer Sentiment data released on Friday were also disappointing. All eyes were on US Federal Reserve Chair Janet Yellen, who spoke on Friday evening, and confirmed that data was supportive of an interest rate rise. Timing is still the unknown.

We can expect a busy week for US data releases this week. Tuesday will see the release of Personal Spending and Personal income data, both of which are expected to show positive increases. This is followed by Consumer Confidence data, which is expected to show its highest level for two months.

On Wednesday we can look forward to the ISM Manufacturing Purchasing Managers’ Index (PMI), which is expecting moderate growth in the sector. Thursday sees the release of ADP Non-Farm Employment Change and the Weekly Unemployment Claims figures, both which are used as indicators for the main Non-Farm Employment Change on Friday. The former are expected to show strong figures.

Friday is expected to be the biggest day of the week, with Non-Farm Employment data expected to remain stable compared to the previous month’s, while Average Hourly Earnings is to show moderate growth and the ISM Non-Manufacturing PMIs are predicted to show good growth in the sector. If we continue to see positivity regarding US data releases, we can expect more talk in favour of a possible interest rate increase at the next US Federal Reserve meeting on 15th June.

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