The Week Ahead
The dollar experienced a decent rally at the end of last week as once again we saw some stronger
than expected prints from US data. The pattern of recent weeks would suggest that the rally for the
greenback will just present traders with better levels to sell against the majors in the early trading
sessions of the week, however some of the underlying factors are changing and we could see this
help the dollar bulls.
What To Watch For
It’s relatively quiet on the data front for the week as we enter the last week proper of the northern hemisphere summer with the US providing the main focus for investors on the macro front. Jackson Hole will provide investors with their with the main focus at the end of the week, although storms in the Gulf Of Mexico could have a significant impact in the earlier sessions.
Key Macro Factors this week:
• Covid 19: Still a major influence on market direction, the numbers in the US appear to be stabilising with those elsewhere seeing stronger spikes (Europe in particular). Investors will continue to monitor daily numbers closely and this can swiftly weigh on currencies.
• Jackson Hole: The annual conference of the great and the good of the financial world takes place at the end of the week and although the set up will be vastly different to previous years the impact on the market could be significant. Expect US Fed Chair Jerome Powell will be the highlight.
• Gulf Storms: Two storms (Marco and Laura) currently blowing in the Gulf of Mexico are set to be upgraded to Hurricanes and their impact could be significant as they hit shores in the southern United States. Oil markets have already priced in considerable disruption to production but investors will be closely monitoring the situation over the next couple of days to assess the economic impact on the region.
• US Politics: This week see’s the Republican party’s annual conference and in general investors are expecting little markets impact. However with President Trump or members of his family set to talk on each evening there is always the chance that we could see some volatility from any fresh updates.