Bank of America Securities: Economic Data Will Drive the Movement of the US Dollar

Investing.com - Ahead of a series of key economic data releases, the US dollar remains near a one-week low, with Bank of America Securities analysts stating that these data could drive recent market movements.

At 09:00 AM Eastern Time (10:00 PM Beijing Time), the dollar index, which measures the US dollar against a basket of six major currencies, was roughly unchanged at 96.700, the lowest level since the end of January.

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In a report issued on February 9, Bank of America Securities said that ahead of this week’s US data releases, the forex market again showed a slight bearish bias on the dollar.

The bank stated, “Below-expected US employment and retail sales data could lead to further dollar declines. However, stronger CPI data should ultimately limit the dollar’s short-term weakening.”

The highly anticipated employment report, originally scheduled for last Tuesday, was delayed due to a brief three-day federal government shutdown. It is expected to show that the US added 70,000 jobs in January, below the 50,000 jobs added in the previous month.

The Consumer Price Index (CPI) data released on Friday is expected to slow to 2.5% year-over-year, down from 2.7% in December.

US retail sales data for December, released earlier on Tuesday, fell short of expectations, remaining flat month-over-month, compared to an expected 0.4% increase.

“After the dollar hit a new low on February 4, we expect more two-way volatility until the next Federal Reserve chair provides further guidance, in the absence of new catalysts,” added Bank of America Securities.

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