The US dollar got off to a roaring start last week. With the safe-haven currency being catapulted to a new two-decade high as the Sterling crisis rippled through markets.
This upside in the ‘greenback’ was also underpinned by expectations for more aggressive interest rate hikes from the Federal Reserve and fears of a looming global recession.
However, some of the US dollar’s shine began to wear off in the latter half of the week, with a revival in market risk appetite and confirmation the US slipped into a technical recession in the second quarter resulting in USD exchange rates falling sharply on Thursday.
The end of the week then saw the US dollar rebound again as a souring market mood and a stronger-than-expected core PCE price index underpinned demand for the currency.
Turning to this week, the main focus for USD investors is likely to be the publication of the latest US non farm payroll release.
Another robust expansion of the US labour force could reinforce Fed rate hike expectations and lift the US dollar.
