The U.S. dollar has an important week ahead with a Federal Reserve meeting, Trump’s tariff deadline looming, and Non-Farm payrolls jobs data.
USDX – Daily Chart
The USDX is testing the key support level, which marks the April low. The dollar needs to get back above that level, or further weakness can see weakness back to the 96.372 low.
The U.S. central bank has an interest rate decision ahead this week, but is expected to hold borrowing levels steady.
The meeting will come after a rare Presidential visit to the bank’s headquarters by Donald Trump. The President has been critical of the Fed Chair, and that could even lead to a surprise cut this week, or at least a change in language. Markets still fear that Trump could try to remove Powell and install a more dovish leader.
Alongside the Fed, there is the looming August deadline for Trump’s tariffs on Europe and others. Deals have been announced with countries like Japan, and the UK, but Trump said last week that an agreement with Canada is far from complete.
“We don’t have a deal with Canada, we haven’t been focused on it,” he said. Trump has written to Canada’s leader and threatened tariffs of 35%. Investors may get nervous if there are no new announcements ahead of the deadline.
The same day as the deadline will be the latest U.S. jobs report, and economists expect to see an additional 102,000 jobs, down from 147,000. U.S. job growth was slower in May, with 139k jobs added, and the unemployment rate was steady at 4.2%.
The week ahead should be an important one for the dollar at the key support level.
