The US dollar index hit a high of 96.87, representing a 0.22 percent increase after US President Trump said it was “probably too soon” to be meeting with the Chinese President. Hopes that a trade deal can be reached to stop a new round of U.S import tariffs on Chinese imports coming into force in March seem to be on the back burner yet again. If an agreement is not met, tariffs on USD 200 billion worth of Chinese goods will rise from 10 percent to 25 percent.
Market participants are awaiting a raft of delayed US data in the wake of the shutdown of the Federal government. This includes durable goods orders, retail sales growth, core inflation, and Q4 GDP growth which will probably be released during the week. Fed Chair Powell is also due to speak on Tuesday, CPI index will be published on Wednesday, and retail sales will be released on Thursday.
For this week, the US dollar could continue to see gains if the political risks return no progress and the economic backdrop continues to abate. Furthermore, the focus will remain on trade talks, Brexit, and corporate earnings in the US.