Summary:

• USD bulls await the FOMC statement looking for some hawkish remarks with regard to the rate outlook
• UK construction PMI is forecast to bounce back noticeably in April 
• Analysts expect another small build in US oil inventories 

It’s going to be a big day for US dollar traders, but not just for them, as an avalanche of data will be going out during the day. Of course, the FOMC statement seems to be a cherry on top, but given the ongoing revival of the greenback one needs to be cautious as some of potentially bullish hints may have been already priced in, therefore risks appear to be slightly tilted to the downside. 

9:30 am BST – UK construction PMI: All soft indicators for March were adversely influenced by the Beast for the East snowstorm, thus many currency traders understandably await readings for April. The first one was out yesterday (manufacturing PMI), and it did not deliver evidence to cheer for GBP buyers to say the least. However, the pound has taken a hit of late, hence it could be prone to at least modest increases as rate hike odds for May have vanished almost altogether. The consensus points at 50.5 against 47 in March. On top of that, final PMIs from many European economies will be also unveiled. 

10:00 am BST – EMU First Quarter GDP: After witnessing robust GDP growth during the last quarter of 2017, and the whole year as well, the European economy is forecast to shift down over the first three months of this year. Given the latest disappointing string of soft indicators one may expect that the slower rate of growth should have been already taken for granted, so the net impact on the shared currency could be dampened. EMU GDP should show 0.4% and 2.5% in q/q and y/y terms respectively. 

1:15 pm BST – US ADP: Waiting for the NFP reading on Friday it’s always worth taking a closer look at the ADP release even as both gauges have been at odds lately. Economists surveyed by Bloomberg anticipate the US economy added 192k new jobs (NFP) in April while the ADP reading should show 200k. Do notice that April was a more favourable month in terms of weather, hence employers could have hired more people in spite of that fact that the employment manufacturing ISM component printed a slowdown. 

3:30 pm BST – EIA oil inventories: As usual we were already offered the API release, and it caught investors off-guard printing a healthy increase (+3.4 million barrels). Moreover, gasoline stockpiles increased as well implying a possibly lower demand from US refineries in the nearest future. Obviously, there were the private calculations and they tend to differ with those releasing by the DoE from time to time. The consensus indicates a tiny build of 0.8 million barrels, but expectations might be tilted subtly to a higher rise. 

7:00 pm BST – FOMC decision: The US dollar has caught a bid of late which has corresponded with higher yields in the longer-end of the curve. Paradoxically, it could curtail room for further gains for the US currency even if the Fed hints at the fourth hike this year (albeit, do not expect explicit remarks on it). There will be neither new forecasts nor press conference therefore everybody should zoom in on the statement (algos will be the quickest obviously, so be careful when you trade). We’re going to produce a preview ahead of this event later today so stay tuned.

 The GBPUSD is breaking down its relevant support line in anticipation of construction PMI, the Fed statement and the ADP release. Source: xStation5