The dollar is waiting for key data. What will the week bring?

The past week on the markets was marked by macroeconomic data, which, despite the fact that they turned out to be worse than expected, pushed the indices to a new maximum. In the following days, investors' attention will focus on central banks - on Thursday we will learn the decision on the level of ECB interest rates. However, Jerome Powell's testimony before the US Congress and Friday's NFP data may prove to be much more important for the markets.

The German economy is in trouble

We have been observing a positive trend in inflation levels in Europe for a long time. Data CPI for February from Germany turned out to be lower than both analysts' forecasts and readings from January. Nevertheless, the German economy is struggling with weak consumer demand. Retail sales readings from Poland's western neighbor have remained negative for several months, and the consumer confidence index does not indicate any immediate improvement in the situation.

So what to expect from Thursday's ECB meeting? Certainly not interest rate cuts. Economists agree that the European Central Bank will maintain its current monetary policy. The majority of ECB members suggested that despite the decline in inflation in the euro zone, the current data are still not sufficient for cuts in the first quarter of this year. Although June is increasingly indicated as the date for the first interest rate cut in the euro zone, it is worth remembering that Christine Lagarde herself believes that the ECB has not made enough progress in the fight against inflation.

After a strong NFP report for January, investors are waiting for data for February. This publication, in addition to Fed Chairman Jerome Powell's speeches before Congress, will probably be the main factor of volatility for the dollar. The market is currently divided as to the timing of the first interest rate cut in the US. Will this week bring any changes in this regard?

In today's webinar:

• What do the latest macroeconomic data tell us?
• What will the ECB do? What will Powell say?
• Bitcoin close to historical highs – why are funds buying?

About the host

Dr Przemysław Kwiecień - Chief economist X-Trade Brokers. Doctor of Economics at the University of Warsaw, graduate of the University of Warsaw and London Metropolitan University (MSc). Holder of the prestigious CFA certificate. He has been working for XTB since 2007, previously he gained experience as an advisor to the Minister of Finance, Mirosław Gronicki, and an economist at Bank Millennium. At XTB, he manages the Analysis Department.

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