This Week: USDInd Surges Towards 2-Year High On US Tariffs Announcement -

This Week: USDInd Surges Towards 2-Year High On US Tariffs Announcement

Feb 03, 2025Jeremy ParkinsonFinance0

Trump tariffs on Canada, Mexico, China start Feb 4

US dollar surges towards 2-year high

Alphabet, Amazon earnings may sway US500 index

BoE likely to cut rates, Pound may weaken

US jobs report to test labor market resilience

February is already off to a cracking start!Over the weekend, President Trump announced the rollout of tariffs on Canada, Mexico, and China starting Tuesday, Feb 4th.Today, the US dollar surged towards its 2-year high around 110.0, putting pressure on the rest of the FX universe, while cryptos and stock indexes also tumbled.Gold pulled back lower from a record high, while oil moved above $76.00.But there’s more market action ahead!This week also features the Bank of England’s rate decision, Big Tech earnings from Amazon and Alphabet, and the ever-pivotal monthly US jobs report.With so many market-moving events lined up, traders will be spoilt for potential opportunities in days ahead.
Events Watchlist:

Tuesday and Thursday, Feb 4th and Feb 6th: Alphabet and Amazon earnings

Alphabet – Google’s parent company – is set to unveil its earnings after US markets close on Tuesday, while Amazon will follow suit after US markets close on Thursday. On the day following their respective announcements, Alphabet stocks are forecasted to react with a 5.7% move up/down on Wednesday, while Amazon’s share price reaction could be 6% up/down on Friday.If these tech giants deliver positive surprises, especially around cloud services for AI, that could restore the US500 index above the 6,000 level, given Amazon and Alphabet’s massive market caps: US$2.47 trillion each.

Thursday, Feb 6th: Bank of England (BOE) rate decision

The BOE is widely expected to cut rates by another 25-basis points in February – anything else would be a shocker. Further out, markets predict a further two rate cuts (25-bps each) for the rest of 2025. Policymakers may be biased towards offsetting economic/labour weakness, especially given the threat of a looming global trade war, and bear with still above-target inflation in the interim.Signs of more/faster BOE rate cuts in 2025 could weaken the Pound and push GBPUSD towards the lower end of the 1.2082 – 1.2429 forecasted range this week, with the 1.2000 big, round number a tantalising target for bears.

Friday, Feb 7th: US January nonfarm payrolls (NFP)

Economists predict that the US labour market added 170,000 new jobs in January, far below December’s 256k figure. Perhaps more crucially, the unemployment rate is expected to stay rooted at 4.1%.If the US jobs market again showcases its resilience, which in turn further pares bets for Fed rate cuts, that should see the US dollar index (USDInd) posting a new 2-year high above the psychological 110.0 mark.Here’s a comprehensive list of other key economic data and events due this week:Monday, February 3

AUD: Australia December/4Q retail sales; January Melbourne Institute inflation

CNH: China January manufacturing PMI

JPY: Bank of Japan meeting minutes

EUR: Eurozone January CPI

RUS2000 index: US January ISM manufacturing

USDInd: Speeches by Atlanta Fed President Raphael Bostic; St. Louis Fed President Alberto Musalem

OPEC+ Ministerial meeting

Tuesday, February 4

US400 index: US December factory orders

USDInd: Speeches by Atlanta Fed President Raphael Bostic; San Francisco Fed President Mary Daly

US500 index: Alphabet earnings

Wednesday, February 5

NZD: New Zealand 4Q unemployment

CN50 index: China January services, composite PMIs

SG20 index: Singapore December retail sales

EU50 index: Eurozone December PPI

USDInd: Speeches by Chicago Fed President Austan Goolsbee and Richmond Fed President Tom Barkin

Thursday, February 6

AU200 index: Australia December trade balance

GER40 index: Germany December factory orders

EU50 index: Eurozone December retail sales

GBP: Bank of England rate decision

MXN: Bank of Mexico rate decision

US400 index: US initial weekly jobless claims; speech by Fed Governor Christopher Waller

NAS100 index: Amazon earnings

Friday, February 7

TWN index: Taiwan January CPI, PPI, trade balance

EUR: Germany December industrial production, trade balance

MXN: Mexico January CPI

US500 index: US January nonfarm payrolls; February consumer sentiment

CAD: Canada January unemployment

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