Rewind: USD Rumbles Through a Busy Week, Excitement to Continue

Talking Points:

• US Dollar Index closes 5 points above the open
• PMI’s and Inflation releases swat greenback around
• Next week to include GDP, NFP’s, and FOMC

A look back at the past week of Forex trading using movements in the US Dollar Index:

US Dollar 1-Hour 17:00 04/21 to 17:00 04/25 EST

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The Dow Jones FXCM US Dollar Index closed the week only 5 points higher than last Sunday’s open, but the greenback managed to post a fair amount of both gains and losses on a mix of releases from around the globe.

Monday’s trading in Forex markets was fairly muted, as there were limited releases and many traders may have returned late from their holiday weekends.

Shortly after the Tuesday close, the US Dollar posted significant gains on news that Australian inflation fell 0.3 percentage points short of expectations for the first quarter of 2014. AUD/USD declined over forty pips on the combination of the consumer prices release and the announcement that the HSBC Chinese Manufacturing PMI met expectations for April.

However, the greenback gave back some of those gains when Euro-zone and German PMI’s significantly beat expectations in the first April estimate. The Euro-zone composite PMI was an entire point higher than expected, and EUR/USD rallied 50 pips on the release.

The US Dollar went on to set a weekly high on Thursday just above 10,490 on the announcement that US Durable Goods Orders increased by the most in four months in March. Almost all of those gains proved temporary, as the greenback slowly fell back through the rest of the week’s trading.

A slightly worse than expected Japanese inflation release for March did not significantly move Yen trading, and the dollar decline continued shortly after the release.

Next week has an amazing amount of high importance US data; US GDP, the FOMC meeting, and the Change in Non-Farm Payrolls all fall in the same week.

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Charts created by Baruch Spier using Marketscope 2.0

-- Written by Baruch Spier, DailyFX Research. Feedback can be sent to [email protected] .