Reviewing the trade for the past week, the US dollar began to show recovery after market expectations for the Federal Reserve (Fed) to maintain a tight policy again increased.
This situation is driven by the hawkish FOMC meeting minutes report as well as encouraging business activity data in the United States (US), different from previous data.
In the previous week, the US dollar had experienced a significant decline when published data including US inflation suggested that interest rate cuts by the Fed should be implemented.
The US dollar has shown a gradual strengthening pattern from the beginning of last week towards the end of the week, but weakened again in the final sessions with analysts believing there was profit taking activity by market players.
Although a little weak at the opening of trading at the beginning of this week, investors need to be aware of the potential for the US dollar to resume its strengthening like last week.
However, the latest indicators will be watched this week such as the US consumer survey data, the PCE price index data and the US economic growth reading for the first quarter of the year.
Other major currencies are likely to strengthen at the start of the week, but gains are expected to be limited.
Like the Euro and the Pound, currencies are at risk of falling as the central bank has signaled a move to ease monetary policy likely to start in June.
If this happens, other central banks may join in without having to wait for a move from the Fed first, which is still in a dilemma.
The development of the commodity market, investors are still expecting a bad performance for crude oil trading when prices have shown a decline over the past week.
Gold also posted a significant weekly drop reaching $2,330 before leveling off slowly at the end of the week.
