NewsEbury FX Weekly Market Update: Dollar rebounds on hawkish Fed officials

The dollar recovered somewhat from its recent drubbing on the back of a steady drumbeat of hawkish Federal Reserve speeches.

Data out of the US and the Eurozone was very light last week, and what there was came out generally better than expected and reinforced the message that the main problem confronting major central banks is still inflation. Sterling was the star of the week, finishing near the top of the rankings on the back of strong inflation and employment data. Beyond G10, it was a tough week for Latin American currencies, which fell back amid weaker commodity prices and concerns about misguided fiscal policies.

With the US trading week shortened by the Thanksgiving holidays, the financial calendar will be dominated by the release of the PMI indices of business activity. We’ll be paying particularly close attention to those in the Eurozone and the UK. Consensus forecasts are gloomy, opening the possibility of a positive surprise. The calendar for central banker speeches is unusually busy this week, including several from the European Central Bank and no fewer than four from the Bank of England.

Read the full Ebury report.