Currency Note US Dollar

Will US data support the US Dollar?

By Ricky Bean December 15th, 2014

The US dollar had a mixed end to the week, with the two major data releases showing opposite outcomes. The inflation indication- courtesy of the the Producers’ Price Index (PPI) – showed a worse figure than expected, detracting from the evidence of a strengthening economy and potential interest rate rises. However, the dollar did get some encouragement from the University of Michigan’s consumer sentiment data. This figure was ahead of expectations, and is now up almost 10% for the year, which helped to curtail the dollar’s losses and end the day up against sterling.

This week starts with a few smaller data releases to ease into the week, including the Empire State manufacturing index, and the industrial production figure. Tomorrow looks mainly to the construction sector, with the building permits and the housing starts figures due, supported later on by the manufacturing Purchasing Managers’ Index (PMI). Wednesday is set to be the most significant, with both data and Federal Open Market Committee (FOMC) activity providing the potential for activity in the markets. Firstly, the main inflation figure in the Consumer Price Index is due. The evening, however, holds the latest meeting from the Federal Reserve, with its economic projections, funds rate and related statement and press conference. With potential interest rate rises still very much at the forefront of investors’ minds, they will be looking for any clues or changes to the central bank’s timescales on when the rate hike will happen.

Thursday then brings us unemployment claims data, and the manufacturing index from the Philadelphia Federal Reserve, before Friday ends on a quiet note.