Positive US data releases on Friday failed to strengthen the US dollar further as investors prepared themselves for this week’s all-important US Federal Reserve interest rate decision. With both retail sales and producer inflation data doing better than expected, talk has returned to a possible interest rate rise as Federal Reserve Chair Janet Yellen previously stated that an increase will be data dependant.
It is going to be a busy week for the US dollar, with data releases expected on Tuesday. Consumer inflation is expected to contract from the previous month. The spotlight, however, will be on Wednesday evening, with the US Federal Reserve interest rate decision taking place, with many investors expecting the Federal Reserve to raise interest rates. If this does happen, we can expect the US Dollar to be supported against the majority of its peers; however, if the central bank leaves rates unchanged we can expect the US dollar to significantly weaken.