The USD continues to move in the data direction as seen last week. There were a couple of economic data from the US which shows the state of the economy. The data were so poor and has put the USD under pressure. The industrial production came at a five months low while Michigan consumer sentiment comes out at six months low. These shows there are slack in the US economy and the fed is not likely to hike rate any-time soon. When the FED dropped the “patience” word from there statement, It was assumed rate hike would come soon, as early as summer. But with the disappointing economic data coming out, rate hike might now happen as soon as expected. The strength of the USD as so far been under pressure and this has push up other pair like GBP and Euro against it. Aussie and Yen are the only currency not performing as expected against USD. This is due to possible some expectations from the RBA governors forward guidance policy and the strength of AUD.
Key economic news and data to watch out for this week is the FOMC statement, the FED are likely to elaborate more about the poor economic data and how it will affect rate hike. In the UK, The CPI data is expected on Tuesday this will have some impact on GBP. Eurozone CPI and German ZEW as well as trade balance are data to watch on Tuesday. In the US, the building permit data also comes out on Tuesday. On Wednesday, the Japanese GDP comes out and later in the day the FOMC statement comes out as well. Thursday comes with Uk retail sales, US existing home sales and German manufacturing PMI.
Overall, the market direction will be based more on fundamental economic data from all major economics. This will push currencies in either direction.