Looking ahead to the upcoming week: Nonfarm Payrolls and Federal Reserve speeches take the spotlight

The US Dollar resumed its weekly upward trend, boosted by shifting developments regarding President Trump’s tariff plans and the Federal Reserve’s hawkish stance at its January 29 meeting, which also contributed to the Greenback’s rise.

The US Dollar Index (DXY) rebounded this week, breaking a two-week losing streak, and charting a volatile yet upward path. The recovery comes amidst ongoing uncertainty over Trump’s trade policies and the Federal Reserve’s cautious approach, creating mixed sentiment in the market. Key events to watch include the ISM Manufacturing PMI on February 3, Construction Spending and the final S&P Global Manufacturing PMI. On February 4, the JOLT job Openings data will be released, followed by Factory Orders and the RCM/TIPP Economic Optimism Index. February 5 will bring the weekly MBA Mortgage Applications, ADP Employment Change report, ISM Services PMI, and final S&P Global Services PMI. Challenger Job Cuts and Initial Jobless Claims will be published on February 6, ahead of the Nonfarm Payrolls and preliminary Michigan Consumer Sentiment on February 7.

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EUR/USD bounced back from weekly lows near 1.0360 on Friday, ending a four-day losing streak. The Euro found support as the US Dollar lost some of its bullish momentum, giving the Euro room to recover. The final HCOB Manufacturing PMI in Germany and the euro area is expected on February 3, alongside the preliminary Inflation Rate for the eurozone. On February 5, we will see the release of final HCOB Services PMIs in the euro area and Germany, as well as producer prices for the broader euro region. Factory Orders in Germany and HCOB Construction PMIs for Germany and the euro area are due on February 6. Germany’s Balance of Trade and Industrial Production data will close the week.

GBP/USD exhibited a choppy performance this week, ultimately ending with slight losses on the weekly chart. The pair struggled to build on last week’s gains, as shifting market sentiment and USD dynamics limited its momentum. The final S&P Global Manufacturing PMI is due on February 3, followed by the Services PMI on February 5. The Bank of England’s meeting on February 6 will take center stage, followed by the Halifax House Price Index and BBA Mortgage Rate on February 7.

USD/JPY continued its bearish trend, marking a third consecutive week of declines as the Japanese yen strengthened. The yen’s appreciation was fueled by persistent speculation of further tightening by the Bank of Japan, adding pressure on the pair. The BoJ’s Summary of Opinions will kick off the week of February 3, along with the final Jibun Bank Manufacturing PMI. On February 5, Average Cash Earnings data will be released, followed by the final Jibun Bank Services PMI. February 6 will feature weekly Foreign Bond Investment figures, while Household Spending and the preliminary Coincidence Index and Leading Economic Index are due on February 7.

AUD/USD regained some momentum on Friday, but it wasn’t enough to salvage the week, which ended in negative territory. This marked the end of a two-week winning streak, as bearish pressures outweighed the late recovery. Building Permits and Retail Sales are expected on February 3, while the Balance of Trade data will be released on February 6.

Economic Perspectives Ahead:

• The Fed’s Bostic will speak on February 3.
• The Fed’s Musalem, Bostic, and Daly will speak on February 4.
• The Fed’s Barkin and Goolsbee are scheduled for February 5.
• The Fed’s Waller and Daly will speak on February 6.
• The BoE’s Pill will speak on February 7.

Central Bank Meetings:

• The BoE and Banxico will decide on rates on February 6.
• The RBI will meet on February 7.