Forex Today – Asian Session: US data will challenge the reign of the Dollar

Next week’s key report will be the US CPI. China’s inflation data will also be released. The UK will report on GDP and employment. As for central banks, the European Central Bank will announce its decision. In the United States, other reports will also be published that could put the recovery of the dollar in check.

Here’s what you need to know for next week:

He insays about the dollar has risen for the eighth consecutive week, reaching its highest close since February above 105.00. US economic data, as well as divergences in outlook compared to Europe and the Eurozone, continue to support US Dollar strength.

Next week, on Wednesday, the US Consumer Price Index (CPI) will be published. More data on inflation will be published on Thursday, including the Producer Price Index (PPI). Additionally, retail sales and unemployment claims are also on the agenda. These figures will represent an important challenge for the recovery of the Dollar. A pronounced slowdown in economic activity and low inflation could make it difficult to extend the dollar’s positive streak. Conversely, a rebound in inflation would provide more fuel to the recovery.

Saturday, China will publish inflation data, which will be closely followed by the markets. The ongoing economic slowdown in China remains a negative factor for risk sentiment. In addition, the G20 meetings begin over the weekend.

The EUR/USD pair recorded another week of losses and closed near the 1.0700 area, the lowest level in months. Apart from the strength of the dollar, the euro was affected by low expectations regarding the European Central Bank (ECB) and its monetary policy. The ECB will hold its monetary policy meeting on Thursday, and it is unclear whether the central bank will continue to raise interest rates.

Following a bounce, the GBP/USD pair resumed its bearish move and fell below 1.2500, reaching its lowest level since June. The Pound erased previous weekly gains following dovish comments from Bank of England (BoE) officials. The UK will report on employment on Tuesday and GDP on Wednesday.

USD/JPY recorded the second highest weekly close in decades, just below 148.00. The divergence between the Bank of Japan and the Federal Reserve continues to support the upside. Current levels could justify further verbal intervention from Japanese authorities.

The AUD/USD pair fell to its lowest level in months, below 0.6400. The Australian dollar remains pressured by falling commodity prices and concerns about the Chinese economy. Australia will report employment data on Thursday.

USD/CAD resumed its upward movement after last week’s pause. It approached 1.3700 but lost momentum. Friday’s positive Canadian employment data boosted the CAD. The bias remains bullish.

Metals experienced sharp declines, but Gold managed to hold above $1,900, while Silver fell below $23.00, approaching a key medium-term support level at $22.50.