The BLS inflation data for January showed that the core component may rise faster than anticipated in the following months. The data supports a fairly strong dollar.
When the pound market may start to be worried about the dramatic increase in the risk of chaotic Brexit. GUS data for December showed a very strong increase in the deficit in the foreign trade of goods.
The British currency may be boosted if the Brexit will be soft. However, the trade data published today by the ONS shows that the trade deficit and current account issues may be negative for the sterling in the long run.
The week's most important events include very weak data from the eurozone and a serious downward revision of forecasts for the eurozone economies. Surprisingly, the pound appreciated in the second part of the week, despite a set of negative reports from the Bank of England.
How does the crude oil market look like concerning the EM currencies? The base case scenario seems to favor trading close to the current levels.
Despite that the Federal Reserve meeting was several days ago, market participants are still not convinced about the Fed's monetary policy. Incoming speeches from the FOMC's official may be crucial for the dollar valuation.