The dollar remains firmly under pressure at the start of this key week despite the best efforts of President Trump to give it a helping hand from Davos. The moves in the currencies and the greenback in particular were dominated last week by comments from the political side of the spectrum at the World Economic Forum in Davos and many traders will be hoping for market forces to come back to the fore as we move into a new month.
Once again the equity and commodity markets had strong moves to the topside on Friday as normal service was resumed and we saw a continuation of the recent trends. The dollar is on the back foot again against most of the majors and players will continue to look for levels to sell in a quiet first few days of the week. Notably, the euro, the Aussie and the Loonie are a strong levels and a continuation of the move could see them break into fresh ranges.
As indicated, it’s very quiet on the fundamental data front today and indeed for the next couple of days, but as the month dial ticks over that dynamic changes and we have probably two of the most important risk events for the markets due in the form of the FOMC and the Nonfarm Payrolls as well as President Trumps State of the Union address. This may keep some of the moves early in the week more muted as we wait to see the outcome of these events.