Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Forex - Weekly outlook: May 22 - 26

Published 2017-05-21, 07:13 a/m
Updated 2017-05-21, 07:21 a/m
© Reuters.  Dollar notches largest weekly loss in almost a year amid political turmoil

© Reuters. Dollar notches largest weekly loss in almost a year amid political turmoil

Investing.com - The U.S. dollar resumed its decline on Friday, notching its largest weekly loss in nearly a year as political turbulence around the Trump administration continued to dominate market sentiment.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ended down 0.79% at a six-month trough of 97.00, having given up all the gains it had made following the election in November.

The index ended the week down 2.12%, its worst weekly loss since last July.

The index has fallen more than 5% from its 14-year high of 103.82 set on January 3, as investors lost faith in the so-called ‘Trump Trade’.

The dollar came under renewed selling pressure following reports that a senior White House adviser is a person of interest in the investigation into alleged Russian interference in November’s presidential election.

The Justice Department on Wednesday appointed a former FBI director as special counsel to investigate possible coordination between the Trump campaign and Russia.

The appointment of a special counsel comes after Trump fired James Comey, his FBI director who was leading a probe into Russia’s role in the election and reports that he attempted to interfere with the judicial process, leading to talk of possible impeachment.

The dollar has been hard hit by fears that the U.S. political system could become engulfed by crisis, preventing lawmakers from pushing through tax or spending reforms.

The stronger euro rallied to fresh six month highs against the dollar on Friday, with EUR/USD advancing 0.95% to 1.1207. The dollar ended the week down 2.5% against the single currency.

Demand for the euro continued to be underpinned as investors shifted their attention back to the outlook for monetary policy as concerns over political risks receded.

Recent economic data has indicated that the economic recovery in the currency bloc is deepening, fueling speculation over how soon the European Central Bank could scale back its stimulus program.

The dollar was also lower against the yen, with USD/JPY down 0.2% to 111.25. The dollar notched its first weekly decline in five against the Japanese currency, falling 1.82%.

The dollar hit six month lows against the traditional safe haven Swiss franc, with USD/CHF down 0.7% at 0.9729 late Friday.

Sterling also gained ground against the greenback, with GBP/USD rising 0.73% to 1.3034 in late trade, to end the week with a gain of 1.16%.

In the week ahead, investors will be looking at Wednesday’s Federal Reserve meeting minutes for fresh indications on the possible timing of the next U.S. rate hike.

Revised data on U.S. first quarter growth and private sector survey data out of the euro zone will also be in focus.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, May 22

Eurogroup finance ministers are to hold regularly scheduled talks in Brussels.

Financial markets in Canada are to remain closed for a holiday.

Tuesday, May 23

The euro zone is to publish survey data on private sector business activity.

The Ifo Institute is to report on German business climate.

Bank of England Governor Mark Carney and several other officials are to testify on inflation and the economic outlook before Parliament's Treasury Committee.

Canada is to release data on wholesale sales.

The U.S. is to publish a report on new home sales.

Wednesday, May 24

ECB President Mario Draghi is to speak at an event in Madrid.

The Bank of Canada is to announce its benchmark interest rate and publish a policy statement which outlines economic conditions and the factors affecting the monetary policy decision.

The U.S. is to report on existing home sales.

The Fed is to publish the minutes of its latest policy meeting, giving investors insight into how officials view the economy and their policy options.

Thursday, May 25

The UK is to publish revised data on first quarter growth, as well as preliminary data on business investment.

The U.S. is to publish the weekly report in jobless claims.

Friday, May 26

The U.S. is to round up the week with data on durable goods orders and a revised data on first quarter growth and consumer sentiment.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.