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US AM Digest: US Dollar Works on Fourth Gain in Five Days

US AM Digest: US Dollar Works on Fourth Gain in Five Days

Research, Research Team


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The US Dollar is trading higher for the fourth time in five days as traders are getting ready for another round of testimony from Fed Chair Jerome Powell, this time in front of the Senate Banking Committee. On Tuesday, Powell’s optimistic commentary regarding the state of the US economy – indicating that the FOMC would upgrade its Summary of Economic Projections when it meets in March – was interpreted as a hawkish shift signaling the potential for four rate hikes this year. Now, there is a 37% chance of a fourth hike by December. Elsewhere, amid the US Dollar turnaround, both the British Pound and the Euro have started to suffer, with both GBP/USD and EUR/USD breaking uptrend support dating back to their respective November lows.

DailyFX Economic Calendar: Thursday, March 1, 2018 – North American Releases

The North American calendar is once again supersaturated, although the bulk of the data has come out of, or is coming out of, the United States. The January US PCE Core readings fell in line with expectations, providing little reason for traders to swing the US Dollar one way or the other. The weekly jobless claims data continued to show exceptional strength in the labor market, which bodes well for next week’s release of the February US Nonfarm Payrolls report. Later today, at 10 EST/15 GMT, as Fed Chair Powell gets set to testify in front of the Senate, the February US ISM Manufacturing report will be released.

DailyFX Webinar Calendar: Thursday, March 1, 2018

IG Client Sentiment Index Chart of the Day: GBPUSD

GBPUSD: Retail trader data shows 50.3% of traders are net-long with the ratio of traders long to short at 1.01 to 1. The number of traders net-long is 15.8% higher than yesterday and 19.2% higher from last week, while the number of traders net-short is 1.5% higher than yesterday and 16.6% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBPUSD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger GBPUSD-bearish contrarian trading bias.

Learn more about the IG Client Sentiment Index on the DailyFX Sentiment page

Five Things Traders are Reading

  1. “US Dollar Posture Continues to Improve; PCE Core, Powell Due Up” by Christopher Vecchio, CFA, Senior Currency Strategist
  2. “USD Consolidation Ahead of Next Move Higher; EURUSD to Suffer” by Nick Cawley, Analyst
  3. “Bullish Signals for Bitcoin Price and Ether Price, Bearish for Ripple and Litecoin” by Martin Essex, MSTA, Analyst and Editor
  4. “Gold, Silver Charts Remain Pointed Lower Thanks to the US Dollar” by Paul Robinson, Market Analyst
  5. “ASX200 Technical Analysis: Stall Leave Bulls With All To Prove” by David Cottle, Analyst

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.