The upcoming week is dominated by the U.S. economic calendar, which by Friday will have absorbed retail sales, PPI, two sets of Fed Chairman speeches, CPI, TIC data, and unemployment claims. This will set up an undeniable economic swingpoint for trade desks to value the U.S. dollar outside of the rhetoric of central bankers jawboning.
The dollar index has come under pressure to hold support after the first of no doubt many transitions into the Treasury market by the Fed in an attempt to buy as many dollar based assets as possible. The ultimate goal of this will be devaule the greenback, something regional central bankers will want to address. A weaker dollar benefits the Fed at this point in time and very few others.
Trade desks will be monitoring the commodity links and carry trade components, both of which may start to reinstate themselves within the wheels of global economic cycles. The oil/cad, gold/aussie, and S&P/Jpy links may start to build during the course of April if the equity earnings season turns out to be no worse than expected. There are major financial players revealing first quarter earnings, which may set the tone for bullish or bearish equity movement, but as we have seen at the beginning of the week the markets are accepting an element of risk, and may reverse the cycle of lower equities equating to a stronger dollar.