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US Dollar Forecast for November 18-22, 2019

November 18, 2019 at 14:32 by Vladimir Vyun

US dollar banknotes and coinsThe US dollar did not fare well last week, either falling or staying flat against its most-traded rivals. What events will be influencing the greenback this week and what traders can expect from the US currency?

One of the major driving factors for the dollar lately were US-China trade negotiations. Hopes for a limited deal between the world’s two biggest economies still persist, and news about progress in the talks can have a significant impact on the US currency. The problem for Forex traders is that it is hard to predict how exactly the news will affect the greenback. On one hand, the currency may be supported by positive developments as they would bode well for the US economy. On the other hand, good news would shift the market sentiment in a risk-on mode, reducing the appeal of the US dollar as a safe currency.

The Federal Open Market Committee will release on Wednesday minutes of its October monetary policy meeting. The FOMC lowered interest rates during the meeting but signaled that it is going to pause its monetary easing cycle. Market participants will study the notes for further details about FOMC plans regarding monetary policy. Analysts are particularly interested in how policymakers voted, specifically how many FOMC members voted for a deeper cut versus how many voted for keeping rates on hold.

This week’s calendar is light in terms of macroeconomic data in the United States. Arguably the most important report will be flash PMI figures from Markit. The manufacturing Purchasing Managers’ Index is expected to rise slightly from 51.3 in October to 51.5 in November. The services PMI is expected to show an increase from 50.6 to 51.2.

It is extremely hard to predict where the US dollar will go this week considering uncertainty surrounding the Sino-US trade talks. DailyFX preferred to stay neutral on the currency in its forecast, saying:

A sudden repricing in trade deal bets could lead to aggressive market volatility and drive demand into the world’s reserve currency.

Forex Crunch was either bullish or neutral on the dollar in its forecasts. It explained the important details that traders should watch in the FOMC minute:

The minutes will provide a closer look at the tendency among central bankers – and help markets assess the next moves in 2020. The Fed’s thoughts on trade relations, inflation, and employment are of interest.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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